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2. “The liberality allowed in the amendment of pleadings pursuant to Rule 15(a) of the West Virginia Rules of Civil Procedure does not entitle a party to be dilatory in asserting claims or to neglect his or her case for a long period of time. Lack of diligence is justification for a denial of leave to amend where the delay is unreasonable, and places the burden on the moving party to demonstrate some valid reason for his or her neglect and delay.” Syllabus Point 3, State ex rel. Vedder v. Zakaib, 217 W.Va. 528, 618 S.E.2d 537 (2005).
3. “[S]pecific words or clauses of an agreement are not to be treated as meaningless, or to be discarded, if any reasonable meaning can be given them consistent with the whole contract.” Syllabus Point 3, in part, Moore v. Johnson Service Co., 158 W.Va. 808, 219 S.E.2d 315 (1975).
4. “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. & Surety Co. v. Federal Ins. Co., 148 W.Va. 160, 133 S.E.2d 770 (1963).
5. “As
a general rule each litigant bears his or her own attorney's fees absent a contrary
rule of court or express statutory or contractual authority for reimbursement.” Syllabus
Point 2, Sally-Mike Properties v. Yokum, 179 W.Va. 48, 365
S.E.2d 246 (1986).
6. “There
is authority in equity to award to the prevailing litigant his or her reasonable
attorney's fees and 'costs,' without express statutory authorization, when the
losing party has acted in bad faith, vexatiously, wantonly or for oppressive
reasons.” Syllabus Point 3, Sally-Mike Properties v. Yokum, 179 W.Va.
48, 365 S.E.2d 246 (1986).
Per Curiam:
Appellant,
City of Dunbar, appeals the September 3, 2004 order of the Circuit Court of Kanawha
County that granted summary judgment to Appellee Dunbar Fraternal Order of Police
in its action to enforce the terms of a collective bargaining agreement entered
into between the two parties. After careful consideration of the parties' arguments,
we affirm, in part, reverse, in part, and remand for additional proceedings.
The
parties to this Agreement hereby agree, commencing at least sixty (60) days prior
to the expiration of this Agreement, to bargain in good faith with regard to
a successor contract. While negotiations are continuing, this Agreement shall
remain in full force and effect for such an additional period of time as is necessary
to negotiate a successor contract.
The third provision at issue is one regarding health insurance premiums which
provides:
The
members of the Police Department covered under this agreement will pay no more
premium or be provided any
less benefit coverage than any other bargaining unit in the City of Dunbar.
By letter
dated August 13, 1998, the City sent notice to the FOP indicating that it did
not intend to renegotiate a contract with the FOP upon the termination of the
CBA on October 16, 1998. On September 24, 1998, the FOP filed an action against
the City alleging in Count I that the CBA contains no termination clause and
that the City was required to bargain for a successor agreement. In Count II,
the FOP contended that the City unilaterally altered the terms of the contract
by requiring police officers to pay contributions toward their health insurance
coverage. Count II further alleges that the City should be required to abide
by the CBA and to continue paying health insurance coverage until the parties
reach a successor agreement.
On March 11, 2000, the circuit court ordered a stay of proceedings pending the outcome of litigation involving the City and its firefighters in regard to health insurance premium contributions. Subsequently, after an August 18, 2003, hearing, the circuit court lifted the stay. On September 2, 2003, the City moved to file an amended answer to set forth a number of additional defenses. By order dated November 14, 2003, the circuit court denied the City's motion, finding that the “Plaintiff is on notice of the Defendant's position by virtue of the remainder of the Answer.” Thereafter, the parties filed cross motions for summary judgment. On September 3, 2004, the circuit court granted the FOP's summary judgment motion.
The circuit
court ruled in its order that the City is required to pay the difference between
HMO and PEIA basic indemnity health premiums for FOP members. The circuit court
further ordered the City to negotiate in good faith with respect to a successor
agreement, ordered the parties to mediate toward an agreement, and ordered the
City to pay for the mediator's fees. Finally, the circuit court ordered the City
to pay for the FOP's attorney fees and costs.
The
liberality allowed in the amendment of pleadings pursuant to Rule 15(a) of the
West Virginia Rules of Civil Procedure does not entitle a party to be dilatory
in asserting claims or to neglect his or her case for a long period of time.
Lack of diligence is justification for a denial of leave to amend where the delay
is unreasonable, and places the burden on the moving party to demonstrate some
valid reason for his or her neglect and delay.
We do not believe that the City has demonstrated a valid reason for its 15-month
delay between the time it filed its answer and the stay of proceedings. Every
new defense sought
to be raised by the City in its proposed amended answer was or should have
been known by the City when it filed its answer. Therefore, we conclude that
the circuit court did not abuse its discretion in denying the City's motion
for leave to file an amended complaint.
Second,
the City contends that the circuit court erroneously granted the FOP's motion
for summary judgment by failing to address arguments raised in the City's motion
for summary judgment and its opposition to the FOP's summary judgment motion.
Specifically, the City claims that the circuit court failed to address its argument
that the CBA is void ab initio pursuant to W.Va. Code § 11-8-26 (1963), (See
footnote 1) which states, in pertinent part,
Except as provided in sections fourteen-b [§ 11-8-14b], twenty-five-a [§ 11-8-25a] and twenty-six-a [§ 11-8-26a] of this article, a local fiscal body shall not expend money or incur obligations:
(1)
In an unauthorized manner;
(2)
For an unauthorized purpose;
(3)
In excess of the amount allocated to the fund in the levy order;
(4)
In excess of the funds available for current expenses.
According to the City, this code section prohibits a local fiscal body from
entering into a contract the performance of which would invade revenue for
a subsequent year. The City contends that because the CBA at issue bound the
City in 1995 to pay wages and benefits to
police officers for 1996, 1997, and 1998, the CBA is void.
Cases
cited by the City in support of its position include State ex rel. Mick v.
County Court of Lewis County, 110 W.Va. 533, 158 S.E.2d 790 (1931), Ireland
v. BOE of Kanawha Co., 115 W.Va. 614, 177 S.E. 452 (1934), and Meador
v. County Court of McDowell Co., 141 W.Va. 96, 87 S.E.2d 725 (1955), in which
this Court refused to enforce multi-year employment contracts entered into by
cities or counties based on W.Va. Code § 11-8-26. The FOP responds by citing Huntington
Water Corp. v. City of Huntington, 115 W.Va. 531, 177 S.E. 290 (1934), in
which this Court recognized the validity of a multi-year contract entered into
by the Huntington Water Corporation and the City of Huntington for water service.
We do
not find it necessary to choose between the two lines of cases cited by the parties
or to revisit those cases in deciding the issue before us. Rather, we deem it
appropriate to decide the instant case on the unique facts before us. First,
it is significant to this Court that, unlike in the cases cited to us by the
City, the City did not challenge the CBA on the basis of W.Va. Code § 11-8-26
during the CBA's original term. Further, the City failed to cite W.Va. Code § 11-8-26
in its answer to the FOP's complaint. In fact, the City did not raise W.Va. Code § 11-8-26
as a defense until it filed its motion for leave to amend its answer. We believe
that the proper time for the City to challenge the CBA's legality on the basis
of W.Va. Code § 11-8-26 was during the CBA's initial term from October 16,
1995,
to October 16, 1998. Because the City failed to do so, we will not at this
stage in the proceedings consider the CBA to be invalid from its inception.
Next,
the City claims that the circuit court erred in ruling that it had an obligation
to bargain with the FOP to reach a successor agreement despite the termination
clause in the CBA. We disagree. While it is true that the CBA, by its terms,
provided that it was to terminate on October 16, 1998, it also contains a provision
indicating that the parties are to bargain in good faith and that the terms of
the CBA are to continue during that bargaining period. The City would have us
enforce the termination clause and disregard the renegotiation provision. This
we decline to do. This Court has held that “specific words or clauses of
an agreement are not to be treated as meaningless, or to be discarded, if any
reasonable meaning can be given them consistent with the whole contract.” Syllabus
Point 3, in part, Moore v. Johnson Service Co., 158 W.Va. 808, 219 S.E.2d
315 (1975). We believe that both the termination clause and the renegotiation
clause should be given meaning, and that the City has a duty under the CBA to
bargain in good faith.
The City,
however, complains that the FOP's interpretation of the renegotiation clause
results in the perpetual enforcement of the CBA. We are sympathetic to the City's
concern. Again, the renegotiation provision indicates that “[w]hile negotiations
are continuing, this Agreement shall remain in full force and effect for such
an additional period of time as is necessary to negotiate a successor contract.” The
language of this provision
appears to indicate that the CBA is to continue until a successor agreement
is reached regardless of when or whether a successor agreement is reached.
We reject such a construction. Generally, this Court will not interpret a contract
in a manner that creates an absurd result. See Syllabus Point 2, Ashland
Oil, Inc. v. Donahue, 159 W.Va. 463, 223 S.E.2d 433 (1976) (holding that “Termination
provisions of an agreement involving the sale of goods which, if applied strictly,
are so one-sided as to lead to absurd results, will be declared unconscionable”); Glen
Falls Ins. Co. v. Smith, 217 W.Va. 213, ___, 617 S.E.2d 760, 768 (2005)
(stating that “A contract of insurance should never be interpreted to
create an absurd result, but should instead receive a reasonable interpretation” citing
Soliva v. Shand, Morahan & Co., Inc., 176 W.Va. 430, 432, 345 S.E.2d
33, 35 (1986), overruled, in part, National Mut. Ins. Co. v. McMahon & Sons,
Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987). Because to read the CBA to
create a perpetual contract from which the City can never extricate itself
is absurd, we interpret the CBA to terminate after a reasonable period of time
regardless of whether a successor agreement is reached.
The City
urges that the CBA should have terminated on October 16, 1998, according to its
termination provision, if no successor agreement was reached. We disagree. The
provision at issue indicates that the CBA is to remain in full force and effect
while negotiations continue. If we were to accept the City's reasoning, that
it was bound to bargain only until the CBA's termination date, the “full
force and effect” language would be unnecessary since the CBA would by its
own terms remain in effect while the parties
bargained. Therefore, we believe that the language at issue should be read
so as to give the parties a reasonable period of time after the termination
date of the CBA to reach a successor agreement, during which time the CBA will
remain in effect. Under the facts of this case, and at this point in this litigation,
we believe that the terms of the CBA should remain in effect until June 30,
2006. This date gives the parties more than six months to bargain in good faith
after receiving this Court's decision on this issue, which we deem to be a
reasonable period of time. If the parties are unable to reach a successor agreement,
the CBA will terminate on June 30, 2006.
Further,
the City assigns as error the circuit court's ruling that police officers cannot
be required to pay the difference in premiums between the PEIA basic indemnity
health plan and the HMO plan. According to the parties, the City provides its
employees with health insurance through the Public Employees Insurance Agency
(hereafter “PEIA”). City employees are permitted to select the type
of coverage they desire from among PEIA's basic health insurance indemnity plan
and an HMO plan. In 1997, the City notified its employees, including police officers,
that all insurance rates would substantially increase, particularly rates for
the HMO plan which would carry a much higher rate than the PEIA basic plan. As
a result, those employees who selected the more expensive HMO coverage were required
to pay the difference in premiums between the PEIA indemnity plan and the HMO
plan. It is the position of the FOP that those officers who selected HMO coverage
are entitled to reimbursement for the difference in the premiums.
The circuit court found on this issue as follows:
The
applicable contractual language is found in Article XVI of the Fraternal Order
of Police (FOP) contract. It states that,
“The
members of the Police Department covered under this agreement will pay no more
premium or be provided any less benefit coverage than any other bargaining unit
in the City of Dunbar.”
Since the FOP coverage necessarily depends on the coverage of other “bargaining units,” it is necessary to look at those contracts to determine the entitlements of the FOP. Therefore, the Court has reviewed the contract between the Dunbar Professional Firefighters (Firefighters) and the City of Dunbar (City). Article Seven, Section 2 of this contract states, in part, that,
“the City shall pay the full amount of the premium attributable to coverage of regular, full- time employees (and his or her dependents) for participation in the City's Insurance Benefits Plan concerning life and health insurance. The plan shall contain hospitalization, major medical coverage, short term disability and life insurance. . . .”
The
FOP contract at issue here was in effect between October 16, 1995 and October
16, 1998. The Firefighters' contract was in effect between February 26, 1995
and February 25, 1998. After careful consideration of the arguments presented,
the Court finds that the City violated Article XIV of the FOP contract in requiring
those officers who had HMO coverage to pay the difference in cost of the HMO
premium and the non-HMO premium during the contract period. The Court finds that
although the City was under no obligation to offer the additional HMO coverage,
once it did so, it was bound by the language of Article Seven, Section 2 of the
Firefirghter contract which obligated the City to pay the full amount of the
premium.
According
to the City, the circuit court erred in its interpretation of the FOP and firefighters'
contracts. The City contends that the FOP contract requires only that the
FOP pay no more of a premium than any other bargaining unit. At all times pertinent
to this litigation, says the City, both the firefighters and the FOP members
who selected the HMO plan have been responsible for the difference between
the more expensive HMO premium and the less expensive PEIA premium. Thus, concludes
the City, the FOP members have not paid more than the firefighters for health
insurance.
We find
that the circuit court erred in granting summary judgment on this issue. The
Health Insurance provision of the CBA provides that “[t]he members of the
Police Department covered under this agreement will pay no more premium or be
provided any less benefit coverage than any other bargaining unit in the City
of Dunbar.” As correctly noted by the circuit court, if the City's firefighters
do not pay the difference between the PEIA basic plan and the HMO plan, the CBA
mandates that the FOP members also cannot be compelled to pay the difference.
The circuit court interpreted the firefighters' agreement with the City to provide
that the City would pay all of the firefighters' premium under the more expensive
HMO plan. However, the City had disputed this very interpretation and, as a result,
the firefighters and the City were in litigation over this issue in a separate
proceeding at the time the circuit court granted summary judgment in the instant
case. This Court has held 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.” Syllabus Point 3, Aetna Cas. & Surety Co. v. Federal
Ins. Co., 148 W.Va. 160, 133 S.E.2d 770 (1963). Again, at the time the circuit
court interpreted
the Dunbar firefighters' CBA, its interpretation remained a question of fact
to be decided in another proceeding. Therefore, we believe the circuit court
erred by prematurely deciding this issue before it was fully litigated. Accordingly,
we reverse the circuit court and remand for further consideration of this issue. (See
footnote 2)
Finally,
the City asserts that the circuit court erroneously awarded attorney fees and
costs to the FOP. In response, the FOP cites two bases for the fees and costs
_ the Wage Payment and Collection Act which provides that employees can receive
reasonable attorney fees and costs for having to pursue litigation to force employers
to pay wages and benefits owed to them; and the fact that the failure of public
officials to discharge their clear duties can be the basis for an award of attorney
fees and costs in mandamus actions.
We reject
the City's argument on this issue. “As a general rule, each litigant bears
his or her own attorney's fees absent a contrary rule of court or express statutory
or contractual authority for reimbursement.” Syllabus Point 2, Sally-Mike
Properties v. Yokum, 179 W.Va. 48, 365 S.E.2d 246 (1986). Also, “[t]here
is authority in equity to award to the
prevailing litigant his or her reasonable attorney's fees and 'costs,' without
express statutory authorization, when the losing party has acted in bad faith,
vexatiously, wantonly or for oppressive reasons.” Syllabus Point 3, Sally-Mike,
supra. (See footnote
3) We believe that the City acted in bad faith by refusing to bargain with
the FOP to reach a successor agreement. Even if this Court accepts that the
City had a good faith belief that the CBA was to terminate on October 16, 1998,
regardless of whether a successor agreement was reached, the fact remains that
the City, 60 days prior to that termination date, flatly refused to attempt
to negotiate a new CBA. Instead, the City simply stated that it did not intend
to renegotiate a contract with the FOP upon the CBA's termination. Such action
was in gross violation of the clear agreement entered into by the parties “to
bargain in good faith with regard to a successor agreement.” Therefore,
we do not believe that the circuit court erred in awarding attorney fees and
costs
to the FOP.
Affirmed,
in part, reversed, in part, and remanded.