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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2008 Term
_____________
No. 33443
_____________
FRANK A. SAVARESE,
Plaintiff Below, Appellant,
V.
ALLSTATE INSURANCE COMPANY, KIM JOZSA
LASHWANDA CARTER, and KIRA HILL,
Defendants Below, Appellees,
______________________________________________________
Appeal from the Circuit Court of Ohio County
The Honorable James P. Mazzone, Judge
Civil Action No. 06-C-69
AFFIRMED
_____________________________________________________
Submitted: January 23, 2008
Filed: September 26, 2008
David A. Jividen
Chad C. Groome
Jividen Law Offices, PLLC
Wheeling, West Virginia
Attorney for Appellant
|
Brent K. Kesner
Ellen R. Archibald
Tanya M. Kesner
Kesner, Kesner & Bramble, PLLC
Charleston, West Virginia
Attorney for Appellees |
JUSTICE BENJAMIN delivered the opinion of the Court.
JUSTICE STARCHER dissents and reserves the right to file a dissenting opinion. JUSTICE ALBRIGHT did not participate in the issuance of this opinion.
SYLLABUS BY THE COURT
1. Under the Privileges and Immunities Clause of the United States
Constitution, Art. IV, Sec. 2, the provisions of W. Va. Code, 56-1-1(c) [2003] do not apply
to actions filed against West Virginia citizens and residents. Syllabus point 2, Morris v.
Crown Equipment Corporation, 219 W. Va. 347, 633 S.E.2d 292 (2006).
2. Pursuant to West Virginia Code § 56-1-1(c) (2003), a nonresident
plaintiff must establish that all or a substantial part of the acts giving rise to his or her claims
occurred in West Virginia in order to establish that venue is appropriate in this state where
no claims are asserted against a West Virginia resident. In an action arising from the failure
to pay a nonresident plaintiff's medical payment claims arising under a contract of insurance
entered into and governed by the law of another state, the nonresident plaintiff's retention
of a West Virginia attorney and communications to that attorney in West Virginia that the
medical payment claims have been denied are insufficient, standing alone, to satisfy the
requirements of West Virginia Code § 56-1-1(c)(2003).
Benjamin, Justice:
In the instant matter, Appellant Frank A. Savarese (hereinafter Mr. Savarese)
seeks reversal of the Circuit Court of Ohio County's October 11, 2006, Memorandum
Opinion and Order dismissing, without prejudice, this first party bad faith action, pursuant
to West Virginia Code § 56-1-1(c)(2003), for lack of subject matter jurisdiction. After
thorough consideration of the arguments of the parties, the record below and all pertinent
legal authorities, we affirm the circuit court's dismissal order.
I.
FACTUAL AND PROCEDURAL HISTORY
Mr. Savarese, a resident of Yorkville, Jefferson County, Ohio, was injured in
a March 14, 2003, automobile accident occurring in Yorkville, Belmont County, Ohio.
(See footnote 1) Mr.
Savarese thereafter retained an attorney located in Wheeling, Ohio County, West Virginia,
to pursue any claims arising from this automobile accident.
(See footnote 2) This attorney promptly filed
suit in the Court of Common Pleas for Jefferson County, Ohio, against the other driver who
was resident of Belmont County, Ohio.
At the time of the accident, Mr. Savarese was insured by the Appellee Allstate
Insurance Company (hereinafter Allstate) under a policy of insurance providing for
Twenty-five Thousand Dollars ($25,000) in medical payments coverage. As a result of
injuries sustained in this accident, Mr. Savarese sought treatment from medical providers in
both Ohio and West Virginia. His claims for medical payments under his Allstate policy
were handled by Allstate representative Kim Jozsa (hereinafter Ms. Jozsa) in Allstate's
Hudson, Ohio, office, Allstate representative Lashwanda Carter (hereinafter Ms. Carter)
in Allstate's Birmingham, Alabama, office,
(See footnote 3) and Allstate representative Kira Hill (hereinafter
Ms. Hill) in Allstate's Birmingham, Alabama, office. During the course of handling Mr.
Savarese's medical payment claims, requests for information and notification of benefit
payments were directed to Mr. Savarese's counsel in Wheeling, West Virginia.
In March 2006, Mr. Savarese filed suit in the Circuit Court of Ohio County,
West Virginia, against Allstate, an Illinois corporation with a principal place of business in
Illinois, Ms. Jozsa, Ms. Carter and Ms. Hill alleging that they failed to exercise good faith
in handling his first-party medical payment claims, that they breached his insurance contract
by failing to pay such claims, that their failure to pay his medical payment claims caused him
severe emotional distress and that Allstate failed to properly train its employees. In his
complaint, Mr. Savarese sought both compensatory and punitive damages. The defendants
promptly removed the action to federal court, however the case was remanded to the Circuit
Court of Ohio County on the basis that the defendants did not demonstrate that the
jurisdictional amount in controversy requirement had been satisfied. Upon remand, Allstate
filed a motion to dismiss asserting that the circuit court lacked both subject matter
jurisdiction and venue over Mr. Savarese's action because it involves no West Virginia
parties and is governed by Ohio law. The individual defendants, appearing specially to
challenge jurisdiction and venue, also filed a motion to dismiss. In addition to the issues
raised by Allstate, the individual defendants argued insufficiency of service of process and
lack of personal jurisdiction as to the claims asserted against them.
In his response to the motions to dismiss, Mr. Savarese admitted that Ohio law
governed his claims but asserted that the Circuit Court of Ohio County, West Virginia, had
jurisdiction to hear this matter because Allstate had directed communications regarding his
medical benefit payments to his Wheeling, West Virginia, attorney and that some of his
medical providers were located in Ohio County, West Virginia. To support this position,
he attached numerous letters directed to his counsel involving his medical payment claims.
Of the fifty-three (53) letters attached, thirty-three (33) involved the denial of payment, in
whole or in part, to an Ohio chiropractor,
(See footnote 4) David A. Smith, D.C.
(See footnote 5) Seven (7) letters indicated
payment in full had been remitted to medical providers.
(See footnote 6) Eight (8) letters were requests for
medical records, medical records release authorizations, and/or further information such as
diagnostic codes and tax identification numbers so that payments could be processed.
(See footnote 7) Two
(2) letters evidence direct reimbursements to Mr. Savarese. An April 13, 2005, letter
indicated that $18,522.57 had been paid in medical expenses to date. The remaining two (2)
letters, both dated March 30, 2005, notified Mr. Savarese's counsel that partial payment had
been made to David Liebeskind, M.D., a West Virginia provider. The Explanation of
Benefits referenced as attached to these two letters which would explain the decision were
not included in the record created in the circuit court and there is no way for this Court to
determine whether the April 13, 2005, letters were duplicates, whether they involved one
or more charges, the reason Dr. Liebeskind was not fully reimbursed, or if he eventually
received full payment.
Applying West Virginia Code § 56-1-1(c)(2003), the circuit court dismissed
the underlying civil action. This statute provided,
(See footnote 8) in pertinent part, that a nonresident of
the state may not bring an action in a court of this state unless all or a substantial part of the
acts or omissions giving rise to the claim asserted occurred in this state. In its October 11,
2006, order, the circuit court noted that no party was a resident of West Virginia and that
[a]ll parties have agreed that Ohio law should apply to the claims. Acknowledging Mr.
Savarese's argument that the acts or omissions giving rise to jurisdiction in West Virginia
are several calls and letters from the Defendants directed to [his] attorney located in Ohio
County, West Virginia[,] the circuit court framed the question before it as whether these
communications constitute 'a substantial part of the acts or omissions giving rise to the claim
asserted.' Answering this question in the negative, the circuit court explained its decision
stating that it did:
not agree that the communications sent to the Plaintiff's
attorney are a substantial part of the acts giving rise to the
claims. The claim was adjusted in offices located in Hudson,
Ohio, and Birmingham, Alabama. Any decisions involving
whether to pay or to deny benefits under the policy were made
at these locations. The decisions were then simply
communicated to the Plaintiff's attorney, but they were already
finalized before they were communicated.
A mere communication to an attorney that a decision has
been made, without more, cannot confer subject matter
jurisdiction. To find differently would put the Defendants in a
situation where they would either have to 1) submit to
jurisdiction anywhere a claimant hires an attorney simply
because they have a duty to communicate with the attorney, or
2) refuse to send correspondence to a claimant's attorney in
order to preserve their jurisdictional defenses, but possibly give
rise to additional bad faith claims for failure to communicate.
The Court believes that more than Plaintiff's counsel's physical
location is contemplated by W. Va. Code § 56-1-1(c) in order
for subject matter jurisdiction to exist over claims filed in this
state by nonresidents.
(footnote omitted). Accordingly, the circuit court dismissed the action, without prejudice,
for lack of subject matter jurisdiction.
(See footnote 9) It is from this order that the instant appeal was taken.
As explained in further detail below, we agree that the mere presence of Mr. Savarese's
counsel in West Virginia, including communications directed to him, is insufficient to permit
the instant action to proceed in the courts of our state. Accordingly, we affirm the circuit
court's dismissal order.
II.
STANDARD OF REVIEW
As noted above, the circuit court dismissed Mr. Savarese's for lack of subject
matter jurisdiction based upon motions to dismiss filed by the various Appellees. Although
it characterized its ruling as one based upon a lack of subject matter jurisdiction, the circuit
court's ruling is clearly based upon application of the then-existing venue statute, W. Va.
Code § 56-1-1(c). In general, this Court will apply a de novo standard of review to a circuit
court's order granting a motion to dismiss. Syl. pt. 2, State ex rel. McGraw v. Scott Runyan
Pontiac-Buick, Inc., 194 W. Va. 770, 461 S.E.2d 516 (1995). See also, Elmore v. Triad
Hospitals, Inc., 220 W. Va. 154, 157-58, 640 S.E.2d 217, 220-21 (2006) (per curiam)
(noting applicability of de novo standard of review to dismissal pursuant to Rule 12(b)(1)
and 12(b)(6)); Johnson v. C.J. Mahan Const. Co., 210 W. Va. 438, 441, 557 S.E.2d 845,
848 (2001) (per curiam) (noting applicability of de novo standard of review to motion filed
pursuant to Rule 12 (b)(1)). However, we recently set forth an abuse of discretion standard
applicable to dismissals for improper venue. Syl. pt. 1, United Bank, Inc. v. Blosser, 218
W. Va. 378, 624 S.E.2d 815 (2005) (This Court's review of a trial court's decision on a
motion to dismiss for improper venue is for abuse of discretion.). A de novo standard of
review is likewise applicable to the extent the circuit court's application of W. Va. Code §
56-1-1(c) is implicated. Syl. pt. 1, Crystal 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.). With
these applicable standards guiding our decision, we affirm the circuit court's decision to
dismiss the underlying action, without prejudice to refile in another jurisdiction.
III.
DISCUSSION
At the outset, in affirming the circuit court's decision, we observe that we are
not bound by the reasons set forth by the circuit court in its decision to dismiss this matter.
As we recently recognized in Hoover v. Moran, 222 W. Va. 112, 662 S.E.2d 711, 718
(2008) (per curiam), our cases have made clear that 'it is permissible for us to
affirm the
granting of [dismissal] on bases different or grounds other than those relied upon by the
circuit court.' Hoover v. Moran, 222 W. Va. at __, 662 S.E.2d at 718, quoting, Gentry v.
Mangum, 195 W. Va. 512, 519, 466 S.E.2d 171, 178 (1995). See also, Schmehl v. Helton, 222 W. Va. 98, 662 S.E.2d 697, 705, n.7 (2008) (this Court may in any event affirm the
circuit court on any proper basis, whether relied upon by the circuit court or not.); Murphy
v. Smallridge, 196 W. Va. 35, 36-7, 468 S.E.2d 167, 168-9 (1996) (An appellate court is
not limited to the legal grounds relied upon by the circuit court, but it may affirm or reverse
a decision on any independently sufficient ground that has adequate support.); Syl. pt. 3, Barnett v. Wolfolk, 149 W. Va. 246, 140 S.E.2d 466 (1965) (This Court may, on appeal,
affirm the judgment of the lower court when it appears that such judgment is correct on any
legal ground disclosed by the record, regardless of the ground, reason or theory assigned by
the lower court as the basis for its judgment.). Thus, while the circuit court based its
dismissal order upon a finding that it lacked subject matter jurisdiction, this finding was
grounded upon application of W. Va. Code § 56-1-1(c), a venue statute. So long as W. Va.
Code § 56-1-1(c) was properly applied, this Court may affirm the decision of the circuit
court regardless of the label the circuit court attached to its reasoning.
A.
W. Va. Code § 56-1-1 (2003)
At the heart of this appeal is whether the circuit court properly applied W. Va.
Code § 56-1-1(c) to prohibit Mr. Savarese's action, based upon Ohio bad faith law, from
proceeding in the Circuit Court of Ohio County, West Virginia. Contained within W. Va.
Code § 56-1-1 (2003), a statute entitled Venue generally, subsection (c) provided in its
entirety:
Effective for actions filed after the effective date of this
section, a nonresident of the state may not bring an action in a
court of this state unless all or a substantial part of the acts or
omissions giving rise to the claim asserted occurred in this state:
Provided, That unless barred in the state where the action arose,
a nonresident of this state may file an action in state court in this
state if the nonresident cannot obtain jurisdiction in either
federal or state court against the defendant in the state where the
action arose. A nonresident bringing such an action in this state
shall be required to establish, by filing an affidavit with the
complaint for consideration by the court, that such action cannot
be maintained in the state where the action arose due to lack of
any legal basis to obtain personal jurisdiction over the
defendant.
In a civil action where more than one plaintiff is joined,
each plaintiff must independently establish proper venue. A
person may not intervene or join in a pending action as a
plaintiff unless the person independently establishes proper
venue. If venue is not proper as to any such nonresident
plaintiff in any court of this state, the court shall dismiss the
claims of the plaintiff without prejudice to refiling in a court in
any other state or jurisdiction.
This Court has had two prior opportunities to address this venue provision. In the first, Morris v. Crown Equipment Corporation, 219 W. Va. 347, 633 S.E.2d 292 (2006), we held,
in syllabus point 2, that [u]nder the Privileges and Immunities Clause of the United States
Constitution, Art. IV, Sec. 2, the provisions of W. Va. Code, 56-1-1(c) [2003] do not apply
to actions filed against West Virginia citizens and residents. (emphasis added). In the
second, In re FELA Asbestos Cases, _ W. Va. _, _ S.E.2d _, 2008 WL 3843830 (W. Va. July
2, 2008), we affirmed the application of W. Va. Code § 56-1-1(c) to dismiss complaints filed
by over a thousand railroad employees against their railroad employers where the parties
stipulated that all of the employee/plaintiffs resided outside of West Virginia, all of their
injuries occurred outside of West Virginia and all of the defendant employers were
incorporated outside of West Virginia. Indeed, in In re FELA Asbestos Cases, _W. Va. at
_, _S.E.2d at _, 2008 WL 3843830 at *4, we expressly recognized the limited scope of Morris stating that in Morris [we] construed the 2003 venue statute to mean that if one of
the defendants in the action was a West Virginia resident, then the action could properly be
filed in a West Virginia court. . . . We therefore permitted the action by a Virginia resident
that arose in Virginia to proceed, because one of the defendants was a West Virginia citizen
and resident. In neither case did we address the degree of conduct which would satisfy the
substantial part of the acts or omissions giving rise to the claim requirement of W. Va. §
56-1-1(c).
B.
all or a substantial part of the acts
or omissions giving rise to the claim
All parties admit that no party herein is a resident of West Virginia and that
Ohio law governs Mr. Savarese's claims. In arguing that it is appropriate to proceed with
his claim in the Circuit Court of Ohio County, West Virginia, Mr. Savarese maintains that
the communications which Allstate directed to his West Virginia attorney were sufficient
to satisfy W. Va. Code § 56-1-1(c)'s requirement that all or a substantial part of the acts or
omissions giving rise to the claim occur in West Virginia where plaintiff is a not a resident
of West Virginia.
(See footnote 10) Relying upon footnote 4 of
Morris, Mr. Savarese argues that we should
look to federal decisions discussing the concept of substantiality under the federal venue
statute, 28 U.S.C. § 1391(a)(2) (2002),
(See footnote 11) as persuasive authority in discussing the scope of
the concept under W. Va. Code § 56-1-1(c).
(See footnote 12) In further support of this argument, Mr.
Savarese relies upon a number of federal cases which stand for the proposition that venue
over a defendant may be proper where the defendant has directed communications into a
jurisdiction. While such a finding may be appropriate in circumstances where the defendant
challenging venue voluntarily directed the relied upon communications to the jurisdiction,
such is not the situation currently before this Court. In the instant matter, Allstate and the
individual defendants were required to direct communications to Mr. Savarese's attorney in
West Virginia solely due to Mr. Savarese's decision to retain a West Virginia attorney. Mr.
Savarese's decision necessitated Allstate directing communications to Mr. Savarese's chosen
representative in order to perform its preexisting contractual duties to Mr. Savarese. Had
Mr. Savarese not retained a West Virginia attorney to represent him in seeking performance
of an Ohio contract for a claim arising in Ohio, the communications relied upon would not
have been directed to West Virginia.
The federal cases relied upon by Mr. Savarese are easily distinguishable from
the situation currently before this Court because each involves circumstances where the
underlying claim arose in the challenged jurisdiction or the defendant voluntarily directed
communications into a jurisdiction in an effort to establish a business relationship or
fraudulently induce action in that jurisdiction. For example, in
Uffner v. La Reunion
Francaise, S.A., 244 F.3d. 38 (1st Cir. 2001), a case heavily relied upon by Mr. Savarese,
the United States Court of Appeals for the First Circuit found venue to be appropriate in
Puerto Rico for a claim of bad faith/wrongful denial of an insurance claim asserted against
a French insurer and underwriters located in England and the State of Georgia. The plaintiff
therein, Uffner, was a resident of the Virgin Islands. Critical to the court's decision that
venue was appropriate in Puerto Rico was the fact that the underlying claim arose from the
sinking of Uffner's yacht in Puerto Rican waters.
Uffner, 344 F.3d at 43. The court rejected
the district court's conclusion that the underlying event, the sinking of the yacht, did not
constitute a substantial part of the events underlying the claim because the loss constituted
a tort action and the bad faith action asserted against the insurers and underwriters sounded
in contract.
Id. at 41. The court explained its reasoning stating:
Appellees argue that Uffner's complaint alleges a bad
faith denial of his insurance claim, not that the loss itself was
due to their fault or negligence. Consequently, they reason, the
sinking of the vessel cannot be considered .substantial.. It is
true, as the district court pointed out, that the legal question in
the suit is .whether [an out-of-water survey] was necessary
under the terms of the insurance contract.. Resolving this issue
does not require an investigation into how, when, or why the
accident occurred. In this sense, the sinking of Uffner's yacht
is not related to the principal question for decision.
However, an event need not be a point of dispute
between the parties in order to constitute a substantial event
giving rise to the claim. Cf. Woodke v. Dahm, 70 F.3d 983, 986
(8th Cir.1995) (requiring that the event itself be .wrongful. in
order to support venue). In this case, Uffner's bad faith denial
claim alleges that the loss of his yacht was covered by the
contract and the payment due to him wrongfully denied. Thus,
although the sinking of La Mer is itself not in dispute, the event
is connected to the claim inasmuch as Uffner's requested
damages include recovery for the loss. We conclude that, in a
suit against an insurance company to recover for losses resulting
from a vessel casualty, the jurisdiction where that loss occurred
is .substantial. for venue purposes.
Id. at 43. Had Mr. Savarese been injured in an accident occurring in West Virginia, Uffner would be on point and persuasive to this Court. In such an event, West Virginia may
arguably have an interest in insuring that damages sustained in this state are appropriately
compensated such that venue for Mr. Savarese's action arising under an Ohio contract and
governed by Ohio law may be appropriate in this state. However, those are not the facts
with which we are presented.
In another case relied upon by Mr. Savarese, Mitrano v. Hawes, 377 F.3d 402,
405 (4th Cir. 2004), the United States Court of Appeals for the Fourth Circuit set forth the
following test for determining whether an act was substantial enough to support venue:
in determining whether events or omissions are sufficiently
substantial to support venue under the amended statute, a court
should not focus only on those matters that are in dispute or that
directly led to the filing of the action. Rather, it should review
the entire sequence of events underlying the claim.
(internal citations and quotations omitted). Mitrano involved a claim for attorneys fees
asserted in the United States District Court for the Eastern District of Virginia by an attorney
against his former client, a resident of Massachusetts. Mitrano, 377 F.3d at 404. At the time
the contract was entered, the attorney was a resident of New Hampshire, but thereafter
moved to Virginia. Id. Pursuant to this contract, the attorney initiated an action on behalf
of the client in the Eastern District of Virginia challenging the transfer of an internet domain
name to the registry of a French court where a trademark infringement case against the client
was pending. Id. The district court found venue to be improper in the Eastern District
because Mitrano's performance of legal work was 'tangential, not substantial' to Mitrano's
breach of contract claim. Id. at 405. The Fourth Circuit disagreed, finding that work
performed under the contract in the Eastern District of Virginia could constitute a
'substantial part of the events [and] omissions giving rise to [Mitrano's] claim' for breach
of contract. Id. at 405-06. Accordingly, the matter was remanded to the district court for
a determination of the extent of work performed within the Eastern District of Virginia and
whether the same constitutes a substantial part of the attorney fee claim. Id. at 406.
Additionally, in Verizon Online Services, Inc. v. Ralsky, 203F.Supp.2d 601
(E.D.Va. 2002), the United States District Court for the Eastern District of Virginia denied
defendants' motions to dismiss for lack of personal jurisdiction and venue in an action
brought by an internet service provider against the Michigan originators of unsolicited bulk
e-mails (hereinafter UBE's) or spam which were transmitted to and through seven of
the internet service provider's servers located in Virginia. Explaining the situation before
it, the court stated:
Crediting the allegations in Verizon's Amended Complaint,
[d]efendants deliberately transmitted millions of UBE to and
through Verizon's e-mail servers in Virginia. In doing so,
[d]efendants solicited business from Verizon's subscribers for
pecuniary gain, while at the same time trespassing on Verizon's
proprietary network causing harm to its servers located in
Virginia.
Defendants knew or should have known that such
trespass violated Verizon's public anti-UBE policy and that the
brunt of the harm caused by their allegedly tortious conduct
would fall on Verizon's servers. Allowing [d]efendants to
escape personal jurisdiction in a forum they have exploited for
pecuniary gain while causing a tort to a Virginia resident would
constitute a manifest unfairness to the rights of Verizon and the
interests of Virginia. Defendants cannot bombard with
impunity a Virginia Internet Service Provider (.ISP.),
consuming server capacity and deluging the ISP's customers
with spam, and then avoid jurisdiction by asserting ignorance of
where the UBE was going or the harm such spam would cause
the ISP's servers and its customers. Defendants knew or should
have known that their UBE was harming Verizon and that
Verizon would bring suit against them where Defendants' spam
caused Verizon the greatest injury. When a business directs
UBE advertising of its products to a Virginia ISP and causes a
tort within Virginia, the business tortfeasor is purposefully
availing itself of the laws of Virginia and thereby subjects itself
to long-arm jurisdiction in Virginia within the contours of the
Constitution.
Verizon Online, 203 F.Supp. 2d at 604. In finding venue to be appropriate in Virginia, the
district court noted that substantial part of the events giving rise to the action requirement
of the venue statute was fulfilled where the gravamen of the complaint involves millions of
messages directed to and through servers located in Virginia. Id. at 623. Specifically, the
Court found that a substantial portion of the defendants' actions giving rise to the claims
occurred in Virginia and harmed property in Virginia and that [a]lthough [d]efendants'
conduct may have originated in Michigan, under Virginia's long-arm statute [d]efendants'
transmission of UBE to and through Verizon's Virginia computers constitutes a 'use' of
those servers which in turn constitutes an act within the Commonwealth. Id.
The remaining cases relied upon by Mr. Savarese in support of his argument
that directing communications into a jurisdiction is sufficient to establish venue in that
jurisdiction involve voluntary actions by the venue-challenging defendant to establish a new
business relationship with a party located in that jurisdiction or fraudulently induce that party
to act. See, e.g., U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., Ltd., 241 F.3d 135,
153 (2nd Cir. 2001) (communications directed to plaintiff in the Southern District of New
York in effort to induce plaintiff into entering charter agreement with defendant were
sufficient to confer venue in Southern District of New York over claims involving charter
agreement and related negotiations regardless of whether communications first passed
through broker in Connecticut); Vishay, Intertechnology, Inc. v. Delta International Corp.,
696 F.2d 1062, 1065-66 (4th Cir. 1982) (finding intentional telephonic and written
communications directed to plaintiff within subject jurisdiction in effort to induce plaintiff
to enter into business contract constituted tortious conduct within the jurisdiction and were
sufficient to establish personal jurisdiction over defendant for state law based claims of
unfair business practices, interference with contractual relations and abuse of process arising
from the communications); Murphy v. Erwin-Wasey, Inc., 460 F.2d 661, 664 (1st Cir. 1972)(Where a defendant knowingly sends into a state a false statement, intending that it should
there be relied upon to the injury of a resident of that state, he has, for [personal]
jurisdictional purposes, acted within that state.) (emphasis added); F.C. Investment Group,
L.C. v. Lichtenstein, 441 F.Supp.2d 3, 11-12 (D.D.C. 2006) (venue was appropriate in
District of Columbia where defendant directed communications to plaintiff in the District
of Columbia with purpose of furthering scheme to defraud plaintiff); Sacody Technologies,
Inc. v. Avant, Inc., 962 F.Supp 1152 (S.D.N.Y. 1994) (finding venue appropriate over
Massachusetts business and its agent in Southern District of New York in action involving
confidentiality agreement where agent initiated contact with New York company, discussed
confidentiality agreement during telephone calls and facsimiles to New York business and
faxed executed confidentiality agreement to New York). Under these cases, venue would
be appropriate in West Virginia if Allstate or its agents directed communications to Mr.
Savarese in West Virginia in an effort to form a new business relationship or to fraudulently
induce Mr. Savarese to act in West Virginia to his detriment. However, those are not the
facts with which we are presented and are not analogous to the situation with which we are
presented where Mr. Savarese's actions caused the communications to be directed to his
attorney in West Virginia. At all times pertinent hereto, Mr. Savarese was a resident of
Ohio.
The sole support in the Complaint filed in the Circuit Court of Ohio County
for Mr. Savarese's claim that venue and jurisdiction are appropriate in West Virginia is the
allegation that Allstate, through its agents, employees and representatives, Defendants
Jozsa, Carter, and Hill, adjusted plaintiff's claims in West Virginia by telephoning plaintiff's
counsel and mailing correspondence to plaintiff's counsel located in Wheeling, Ohio
County, West Virginia. Thus, the crux of Mr. Savarese's argument is that he retained an
agent in West Virginia to pursue his claims under this contract with Allstate, directed
Allstate to communicate with his agent in West Virginia and by Allstate and its agents
communicating with his agent as required under his pre-existing Ohio contract, West
Virginia is an appropriate venue in which to resolve his claims. We find this argument
unpersuasive. While it is true that an attorney serves as an agent of a client, see e.g., May
v. Seibert, 164 W. Va. 673, 680, 264 S.E.2d 643, 646 (1980) (Rules of ethics declare that
a lawyer is an agent of his client. It is the client's cause and decision that should prevail.),
where the agent's acts are not at issue, the mere presence of the agent in a jurisdiction should
not be the sole foundation to support venue in that jurisdiction. Indeed, a fundamental tenet
of agency law is that the principal is liable for the acts of the agent. Where the acts of the
agent are not at issue in determining liability, the location of the agent is not relevant to a
venue determination. As noted by Appellees in response to Mr. Savarese's argument that
his bad faith claim arose upon his attorney's receipt of communications that medical
payments had been refused, the claim belongs to Mr. Savarese, an Ohio resident, not his
attorney. Allstate owed a contractual obligation to Mr. Savarese, not his attorney. Until Mr.
Savarese was aware that the payment has been denied and incurred damages as a result, he
had no claim arising from the refused payment. His attorney merely served as a conduit of
the denial information to him, much as the Connecticut brokers served as conduits of
information in U.S. Titan, supra. We agree with the circuit court that a finding that the
attorney's physical location is sufficient to satisfy the requirements of W. Va. Code § 56-1-
1(c) would subject a defendant to claims in whatever venue in which a plaintiff decides to
retain an attorney, regardless of the venue's connection to the claim itself.
Accordingly, we now hold that the retention by Mr. Savarese, an Ohio
resident, of a West Virginia attorney to pursue medical payment claims under an Ohio
insurance contract for an injury sustained in Ohio is insufficient to establish venue under
W. Va. Code § 56-1-1(c) for a cause of action governed by Ohio law arising from the denial
of payment of such medical claims where no party to the action is a West Virginia resident.
Pursuant to West Virginia Code § 56-1-1(c) (2003), a nonresident plaintiff must establish
that all or a substantial part of the acts giving rise to his or her claims occurred in West
Virginia in order to establish that venue is appropriate in this state where no claims are
asserted against a West Virginia resident. In an action arising from the failure to pay a
nonresident plaintiff's medical payment claims arising under a contract of insurance entered
into and governed by the law of another state, the nonresident plaintiff's retention of a West
Virginia attorney and communications to that attorney in West Virginia that the medical
payment claims have been denied are insufficient, standing alone, to satisfy the requirements
of West Virginia Code § 56-1-1 (c)(2003).
In a final effort to support his argument that West Virginia has sufficient
contacts with this action to support jurisdiction and venue, Mr. Savarese attached additional
correspondence from Allstate involving West Virginia providers to both his Petition for
Appeal and his Appeal Brief. However, these materials were not submitted to the circuit
court, are not a part of the circuit court record and are not properly before this Court. As we
recently stated in Jackson v. Putnam County Board of Education, 211 W. Va. 170, 178, 653
S.E.2d 632, 640 (2007) (per curiam), the parties have an obligation to 'make sure that
evidence relevant to a judicial determination be placed in the record before the lower court'
so that this Court may properly consider it on appeal. West Virginia Department of Health
and Human Resources ex rel. Wright v. Doris S., 197 W. Va. 489, 494 n. 6, 475 S.E.2d 865,
870 n. 6 (1996). In Powderidge Unit Owners Association v. Highland Properties, 196
W. Va. 692, 700, 474 S.E.2d 872, 880 (1996), this Court clearly stated that our review is
limited to the record as it stood before the circuit court at the time of its ruling. See also, Pearson v. Pearson, 200 W. Va. 139, 145, 488 S.E.2d 414, 420, n. 4 (1997) (This Court
will not consider evidence which was not in the record before the circuit court.). As the
neither the allegations set forth in the Complaint nor the materials submitted for
consideration to the circuit court in ruling upon the motions to dismiss demonstrate that all
or a substantial part of acts or omissions forming the basis of Mr. Savarese's claims occurred
in West Virginia, this action was properly dismissed pursuant to W. Va. Code §56-1-
1(c)(2003).
IV.
CONCLUSION
For the reasons set forth herein, the Circuit Court of Ohio County's October
11, 2006, is affirmed. Communications directed to Mr. Savarese's West Virginia attorney
are insufficient to satisfy the requirements of W. Va. Code §56-1-1(c)(2003).
The town of Yorkville, Ohio, is situated partially in Jefferson County, Ohio, and
partially in Belmont County, Ohio.
Footnote: 2
Wheeling, West Virginia, is situated east of Belmont County, Ohio, directly across
the Ohio River and is south of Yorkville.
Footnote: 3
Mail for Allstate's Birmingham, Alabama, office is sent to a Dallas, Texas, address.
Footnote: 4
After noting the medical providers he saw in West Virginia, Mr. Savarese makes a
somewhat disingenuous statement in his brief before this Court that he received no medical
treatment in Jefferson County, Ohio, save an MRI performed in Steubenville, Ohio.
However, in the materials he filed before the circuit court he admits to receiving treatment
from David A. Smith, D.C., a chiropractor practicing in St. Clairsville, Ohio, and Thomas
J. Romano, M.D., a physician practicing in Martins Ferry, Ohio. Both St. Clairsville and
Martins Ferry are located in Belmont County, Ohio.
Footnote: 5
Of these thirty-three (33) letters, four (4) were dated July 17, 2003, nine (9) were
dated January 21, 2004, four (4) were dated May 19, 2004, two (2) were dated October 4,
2004, two (2) were dated January 5, 2005, and six (6) were dated March 29, 2005. Although
each letter referenced an attached explanation of benefits to explain why full payment was
not rendered, no attachments were included with any of the letters submitted by Mr.
Savarese. Therefore, it is impossible for this Court to know, based upon the record before
it, whether the letters bearing the same dates involved distinct payment decisions or were
simply duplicates.
Footnote: 6
Again, the explanation of benefits referenced in these letters were not included in the
materials submitted to the circuit court so there way for this Court to know what medical
provider had received payment.
Footnote: 7
Two of these letters involved four West Virginia health care providers, Wheeling
Hospital, A.V. Jellen, M.D., the Howard Long Wellness Center and the Ohio Valley Medical
Center. There is no evidence on the record before this Court that these providers were not
ultimately paid in the fourteen months between the date of the last letter and filing of Mr.
Savarese's response to the motions to dismiss.
Footnote: 8
Subsequent to this Court's decision in
Morris v. Crown Equipment Corporation, 219
W. Va. 347, 633 S.E.2d 292 (2006),
cert. denied, 127 S.Ct. 833, 166 L.Ed.2d 665 (2006),
cert. denied, 127 S.Ct. 833, 166 L.Ed.2d 665 (2006), which found this statute constitutionally
infirm when a claim was asserted against a West Virginia defendant, the Legislature repealed
W. Va. Code § 55-1-1(c) (2003) and enacted a separate
forum non conveniens statute at
W. Va. Code § 56-1-1a (2007). As subsection (c) to W. Va. Code § 56-1-1 has been
repealed, all references to W. Va. Code § 56-1-1(c) herein are to 2003 enactment.
Footnote: 9
The circuit court recognized the additional grounds raised by the appellees in their
motions to dismiss, specifically W. Va. R.Civ. Pro. 12(b)(2) (lack of jurisdiction over the
person), W. Va. R.Civ. Pro. 12(b)(3) (improper venue), and W. Va. R.Civ. Pro. 12(b) (5)
(insufficiency of service of process). However, the circuit court declined to address these
grounds based upon its lack of subject matter jurisdiction.
Footnote: 10
Mr. Savarese has made reference to the fact that Allstate does business in West
Virginia by issuing policies and adjusting claims arising in West Virginia. He also admits,
however, that such business is unrelated to his claims. As we recognized in
In re FELA
Asbestos Cases, venue is not proper, under W. Va. Code § 56-1-1(c) over a defendant who
may do business in this state where the defendant is not incorporated in this state
and the
claim is unrelated to the business conducted by the defendant in this state.
Footnote: 11
28 U.S.C. § 1391(2002), the federal general venue statute provides, in pertinent part:
(a) A civil action wherein jurisdiction is founded only on
diversity of citizenship may, except as otherwise provided by
law, be brought only in (1) a judicial district where any
defendant resides, if all defendants reside in the same State, (2)
a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part
of property that is the subject of the action is situated, or (3) a
judicial district in which any defendant is subject to personal
jurisdiction at the time the action is commenced, if there is no
district in which the action may otherwise be brought.
Footnote: 12
Although Mr. Savarese asserts that this Court clearly recognized federal law in this
area as persuasive for defining this term in footnote 4, we would note that footnote 4 was
included in the factual background portion of the Morris opinion and set forth the arguments
made by the appellant therein. However, it is correct that this Court often relies upon federal
authority addressing similar concepts as persuasive authority.