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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2001 Term
DAVID M. HARRIS, M.D.,
Plaintiff Below, Appellant,
HAMILTON JONES and MUTUAL INSURANCE AGENCY, INC.,
a West Virginia corporation, Defendants Below, Appellees.
Appeal from the Circuit Court of Mercer County
Honorable John R. Frazier
Case No. 98-CV-613-F
REVERSED AND REMANDED
Submitted: June 12, 2001
Filed: June 28, 2001
Kathryn Reed Bayless, Esq.
Charles M. Love, III, Esq.
Bayless & McFadden
Michael J. Halaiko, Esq.
Princeton, West Virginia
Kimberly R. Wilson, Esq.
Attorney for Appellant
Bowles, Rice, McDavid, Graff & Love
Charleston, West Virginia
Norris Kantor, Esq.
Katz, Kantor & Perkins
Bluefield, West Virginia
Attorneys for Appellees
The Opinion of the Court was delivered PER CURIAM.
JUSTICE MAYNARD dissents and reserves the right to file a dissenting opinion.
SYLLABUS BY THE COURT
1. A motion for summary judgment should be granted only when it is
clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not
desirable to clarify the application of the law. Syllabus Point 3, Aetna Cas. & Sur. Co. v.
Federal Ins. Co. of New York,
148 W.Va. 160,
133 S.E.2d 770
2. The circuit court's function at the summary judgment stage is not to
weigh the evidence and determine the truth of the matter, but is to determine whether there
is a genuine issue for trial. Syllabus Point 3, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d
3. The 'discovery rule' is generally applicable to all torts, unless there is
a clear statutory prohibition of its application. Syllabus Point 2, Cart v. Marcum, 188
W.Va. 241, 423 S.E.2d 644 (1992).
4. 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 Hospital, Inc.,
199 W.Va. 706, 487 S.E.2d 901 (1997).
This is an appeal from the Circuit Court of Mercer County by a practicing
physician of an order granting summary judgment in favor of an insurance agency and an
individual insurance agent. The physician alleged that the insurance agent sold him a policy
that failed to fully cover the physician in a medical malpractice lawsuit settlement. The
circuit court concluded that the physician's action was barred by the statutes of limitation for
both tort and contract actions.
After carefully examining the record, we conclude that questions of material
fact remain. Accordingly, as set forth below, we reverse the circuit court's summary
The appellant, Dr. David Harris (Dr. Harris), is a physician who practices
plastic and reconstructive surgery in both
Bluefield, Virginia, and Bluefield, West Virginia.
In late 1989 or early 1990, Dr. Harris
was deciding whether to renew his existing malpractice
insurance policy, or to purchase a different policy from insurance agent Hamilton Jones
(Mr. Jones), one of the appellees in the instant case.
Mr. Jones is an agent of the appellee, Mutual Insurance Agency, Inc. (MIA).
Mr. Jones offered Dr. Harris a medical malpractice liability insurance policy to be issued by
Physicians National Risk Retention Group (PNRRG).
Mr. Jones' chief selling point was
the substantially lower price of the PNRRG policy.
Mr. Jones told Dr. Harris
PNRRG policy was sound.
However, according to Dr. Harris,
did not tell
that PNRRG was
not backed up by the West Virginia Insurance Guaranty Association (Guaranty Fund),
a statutorily-created fund that provides a degree of backup coverage when an insurance
company cannot meet its obligations. See W.Va. Code, 33-26-1 to -19 .
further contends that the appellees failed to comply with W.Va. Code, 33-32-9 See footnote 1
failing to include on the insurance application form and on the declaration page notice that
the policy being purchased was not subject to the insurance laws or protected by the
purchased the PNRRG policy in or around February 1990.
On June 22, 1990, Dr. Harris and other health care providers performed surgery
on a patient to remove a blockage from her esophagus. The patient experienced
complications from the surgery. Subsequently,
the patient sued
and the other
medical care providers who were involved in her care, claiming medical malpractice.
In November 1991,
during the course of the malpractice litigation, PNRRG was
placed into receivership in Louisiana.
questioned Mr. Jones about the PNRRG
receivership and was allegedly told
by Mr. Jones
not to worry; that PNRRG had plenty
of money; that PNRRG's being placed into receivership was a political problem; and that
it was just a case of lawyers . . . gouging each other. PNRRG did provide Dr. Harris with
a legal defense for the medical malpractice
Mr. Jones allegedly also assured Dr. Harris that PNRRG, even though in
receivership, would pay between 90 and 95 percent of any malpractice judgment or any
settlement that was reached in the pending malpractice litigation.
In May 1993,
relying on Mr. Jones' representations, Dr. Harris
entered into a
settlement agreement in the medical malpractice case for $100,000 plus interest.
As part of
the settlement, Dr. Harris
pledged to personally pay any deficiency between the agreed-upon
settlement and any payment made toward the settlement by PNRRG.
In October 1995, the medical malpractice plaintiff received a payment of
approximately $28,000 from PNRRG's receivership. Whether PNRRG would be able to pay
more than the $28,000 remained questionable.
A review of the record indicates that at the
time this case was appealed, PNRRG's liquidation was yet to be finalized, PNRRG had not
paid any additional monies toward the settlement of the malpractice claim, nor had
personally paid any money toward the settlement.
Dr. Harris claims
that it was in the summer of 1997
that he first learned: (1)
that the PNRRG receivership proceeds would be substantially inadequate with respect to the
malpractice settlement; and (2) that any balance owed after PNRRG made its final payment
on the settlement agreement would not be paid by the Guaranty Fund. Specifically, Dr.
Harris alleges that it was in the summer of 1997, after he began to hear rumors from other
doctors that the Guaranty Fund did not cover certain medical malpractice claims,
consulted an attorney who told
PNRRG's policy was not covered by the Guaranty
In November 1998, Dr. Harris instituted the instant action in the Circuit Court
of Mercer County against the appellees, claiming that Mr. Jones and MIA misled Dr. Harris
and recommended and sold him a policy of insurance from a company that Mr. Jones and
MIA knew, or should have known, was financially unsound. Dr. Harris further contended
that the appellees negligently failed to inform Dr. Harris that the policy would not be
protected by West Virginia's
Guaranty Fund, failed to comply with specific statutory
requirements relating to notice that Guaranty Fund protection was not available, and that he
suffered severe emotional distress as a result of the failure of his professional liability policy
to protect him in the event of a malpractice claim against him.
Mr. Jones and MIA filed motions for summary judgment, asserting that Dr.
Harris' actions were barred by statutes of limitation.
The circuit court granted the appellees' motions for summary judgment, finding
that Dr. Harris' action was untimely. Specifically, the circuit court found that
former insurance agent had informed Dr. Harris
in 1990 regarding risks associated with
PNRRG. Furthermore, the circuit court found that Dr. Harris's PNRRG policy specifically
stated that STATE INSURANCE INSOLVENCY GUARANTY FUNDS ARE NOT
AVAILABLE FOR THE RISK RETENTION GROUP.
Lastly, the trial court found that
on June 29, 1993,
received a certified mail letter from PNRRG informing
that PNRRG did not belong to any guaranty fund.
In an order dated July 11, 2000, the circuit court granted summary judgment
in favor of Jones and MIA concluding, as a matter of law, that Dr. Harris' claims were barred
by the statutes of limitation for both tort and contract actions.See footnote 2
Dr. Harris appeals from this
In the instant appeal, the controlling question is whether the granting of
summary judgment was appropriate. This Court reviews summary judgments under a de
novo standard. We have consistently said that [a] circuit court's entry of summary judgment
is reviewed de novo. Syllabus Point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755
In Syllabus Point 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York,
148 W.Va. 160, 133 S.E.2d 770 (1963), we stated the basic rule that:
A motion for summary judgment should be granted only when
it is clear that there is no genuine issue of fact to be tried and
inquiry concerning the facts is not desirable to clarify the
application of the law.
At the summary judgment stage, the benefit of the doubt is to be given to the
nonmoving party. All inferences drawn are to be made in favor of the nonmoving party.
Both this Court and the court below must draw any permissible inference from the
underlying facts in the light most favorable to the party opposing the motion. Painter v.
Peavy, 192 W.Va. at 192, 451 S.E.2d at 758.
In assessing the factual record, we must grant the nonmoving party the benefit
of all inferences, as '[c]redibility determinations, the weighing of the evidence, and the
drawing of legitimate inferences from the facts are jury functions, not those of a judge[.]'
Williams v. Precision Coil, 194 W. Va. 52, 59, 459 S.E.2d 329, 336 quoting Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202, 216
Additionally, we have concluded that
[t]he inferences to be drawn from the underlying
affidavits, exhibits, answers to interrogatories,
and depositions must be viewed in the light most
favorable to the party opposing the motion.
On a motion for summary judgment, neither a
trial nor appellate court can try issues of fact; a
determination can only be made as to whether
there are issues to be tried. To be specific, if
there is any evidence in the record from any
source from which a reasonable inference can be
drawn in favor of the nonmoving party, summary
judgment is improper.
Hanlon v. Chambers, 195 W.Va. 99, 105, 464 S.E.2d 741, 747 (1995).
The standard for summary judgment is high. Summary judgment should be
denied even where there is no dispute as to the evidentiary facts in the case but only as to
the conclusions to be drawn therefrom. Pierce v. Ford Motor Co., 190 F.2d 910, 915 (4th
Cir.), cert. denied, 342 U.S. 887, 72 S.Ct. 178, 96 L.Ed. 666 (1951).
In Painter v. Peavy, this Court held that [t]he circuit court's function at the
summary judgment stage is not to weigh the evidence and determine the truth of the matter,
but is to determine whether there is a genuine issue for trial. Syllabus Point 3, Painter v.
principal contention is that his claims should not barred as untimely
because any applicable periods of limitation did not begin to run until the summer of 1997
when Dr. Harris came to understand that neither PNRRG nor the Guaranty Fund would cover
the medical malpractice settlement.See footnote 3
Alternatively, Dr. Harris contends that any untimeliness
in his filing was a result of the appellees' conduct, thereby estopping the appellees from
asserting Dr. Harris' alleged untimeliness as a defense. Dr. Harris' claims sound in both tort
Ordinarily, the applicable statute of limitation begins to run when the
actionable conduct occurs. The tolling of the statute of limitations under
rule' is generally applicable to all torts, unless there is a clear statutory prohibition of its
Syllabus Point 2, Cart v. Marcum, 188 W.Va. 241, 423 S.E.2d 644 (1992). We
have further stated that under the 'discovery rule,' the statute of limitation is tolled until a
claimant knows or by reasonable diligence should know of his claim.
Gaither v. City
199 W.Va. 706, 711, 487 S.E.2d 901, 906 (1997) citing Syllabus Point 1, Cart
v. Marcum, supra.
The purpose of a discovery rule is the recognition
of the inherent unfairness
of barring a claim when a party's cause of action could not have been recognized until after
the ordinarily applicable period of limitation.
. . . under the discovery rule the statute of limitation 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, in part, Gaither.
With regard to contract actions, this Court has stated that the statute of
limitations begins to run when the breach of the contract occurs or when the act breaching
the contract becomes known. McKenzie v. Cherry River Coal & Coke Co., 195 W.Va. 742,
749, 466 S.E.2d 810, 817 (1995) (per curiam). See also Gateway Communications, Inc. v.
John R. Hess, Inc., 208 W.Va. 505, ____, 541 S.E.2d 595, 599 (2000). The equitable
principles of the Gaither analysis are, therefore, applicable to the plaintiff's tort and contract
claims in the instant case.
Dr. Harris has appealed the granting of summary judgment against him and
in favor of the appellees, insurance agent Jones, and insurance agency MIA. It appears to
the Court that reasonable persons
could reach different conclusions on the issue of the
timeliness of Dr. Harris' suit against the appellees. While a fact finder could conclude that
Dr. Harris had notice prior to the summer of 1997 that the PNRRG policy was not protected
by the Guaranty Fund,
fact finder might also conclude that
because of the
appellees' continued assurances of PNRRG's soundness, did not have reason to appreciate
the significance of the lack of Guaranty Fund coverage until the summer of 1997.See footnote 4
Or, a fact
finder could conclude that Dr. Harris had indeed slept on his rights and that his action
It is for the jury to decide when Dr. Harris recognized, or through reasonable
diligence should have appreciated, that the appellees had sold him an inadequate insurance
policy. In a great majority of cases, the issue of whether a claim is barred by the statute of
limitations is a question of fact for the jury. Gaither, 199 W.Va. at 174-175, 487 S.E.2d at
Therefore, because there are remaining issues of material fact to be
determined, we conclude that the trial court erred in granting summary judgment for the
The July 11, 2000 order of the Circuit Court of Mercer County granting
summary judgment for the appellees is reversed and this case is remanded for further
accordance with this opinion.
Reversed and Remanded.
1W.Va. Code, 33-32-9  provided that:
Any policy issued by a risk retention group shall contain in ten-
point type on the front page and the declaration page, the
This policy is issued by your risk retention group. Your risk
retention group may not be subject to all of the insurance laws
and regulations of your state. State insurance insolvency
guaranty funds are not available for your risk retention group.
This statute was revised by the Legislature in 1992; however, no changes were made
that affect this appeal.
2The statute of limitation for tort actions,
W.Va. Code, 55-2-12 , states that:
Every personal action for which no limitation is otherwise
prescribed shall be brought: (a) Within two years next after the
right to bring the same shall have accrued, if it be for damage to
property; (b) within two years next after the right to bring the
same shall have accrued if it be for damages for personal
injuries; and (c) within one year next after the right to bring the
same shall have accrued if it be for any other matter of such
nature that, in case a party die, it could not have been brought at
common law by or against his personal representative.
Similarly, the statute of limitation for implied contract actions,
W.Va. Code, 55-2-6
 states, in pertinent part, that:
Every action to recover money, which is founded upon . . .
any contract other than a judgment or recognizance, shall be
brought within the following number of years next after the right
to bring the same shall have accrued, that is to say: . . . if it be
upon any other contract, express or implied, within five years[.]
Dr. Harris also argues that any applicable period of limitation still has not begun to
run because Dr.
has not yet suffered any damages; and that his lawsuit was therefore
merely a prophylactic filing. This argument was not raised before the circuit court. For
purposes of this decision, we will assume that Dr. Harris' causes of action sufficiently
accrued at a time in the past so as to implicate the statute of limitation issue.
The parties agree that the applicable periods of limitation for Dr. Harris' claims are,
at the least 2 years, which would make his 1998 filing timely if the period of limitation began
running in the summer of 1997.