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Michael v. Consolidation Coal Co.

United States District Court, N.D. West Virginia

March 31, 2017

MICHAEL D. MICHAEL, as the Administrator of the ESTATE OF JACK D. MICHAEL, and JUDITH A. KUHN, as the Administratrix of the ESTATE OF PAUL F. HENDERSON, et al., Plaintiffs,



         Pending before the Court are the Report and Recommendation (“R&R”) of United States Magistrate Judge (ret.) John S. Kaull (dkt. no. 99), and the motion to dismiss filed by the defendant, Consolidation Coal Company (“CCC”) (dkt. no. 4). This case stems from the deaths of seventy-eight miners as a result of a tragic coal mining explosion in 1968. Ultimately, the Court concludes that the Plaintiffs' wrongful death claim is barred by the then applicable two-year limitation period, and was not tolled by either the discovery rule or the fraudulent concealment doctrine. Accordingly, the Court ADOPTS the R&R and GRANTS the defendant's motion to dismiss.

         I. BACKGROUND

         A. Factual Background

         On the fateful day of November 20, 1968, the Consol No. 9 coal mine (“the Mine”), located near Farmington, West Virginia, exploded and caught fire, resulting in the deaths of seventy-eight coal miners. Following ten years of recovery efforts, the Mine was permanently sealed in November of 1978.

         At the time of the explosion, the Mine had four ventilation fans that controlled the level of methane buildup resulting from the mining operations. The No. 3 fan, which is the only fan at issue in this case, was located at Mod's Run near the 4 North area of the Mine (“Mod's Run fan”). Each fan was controlled by a “FEMCO Supervisory Control” safety alarm system (“FEMCO”), which was designed to trigger a red light and audible alarm in the Mine's lamp house whenever the fan slowed down or stopped. When triggered, the alarm would notify the underground miners of the situation; if the fan remained inoperable for more than twelve minutes, the alarm would shut down electricity to the Mine.

         For the next twenty-two years, inspectors from various state and federal agencies conducted multiple investigations into the fire and explosion at the Mine. One of the inspectors was Larry L. Layne (“Layne”), who worked for the Mine Safety and Health Administration (“MSHA”). Layne filed a memorandum of his investigation on September 15, 1970, in which he reported the following:

On September 5, 1970, 12am-8am shift, the Mods Run substation was energized for the first time since the explosion of November 20, 1968. The electrician (name withheld by request) reported that while energizing the substation he found evidence to indicate that the FEMCO fan alarm system for Mod's Run fan had been rendered inoperable prior to the explosion. The fan alarm system had been bridged with jumper wires; therefore, when the fan would stop or slow down, there was no way of anyone knowing about it because the alarm system was bypassed . . . .

(Dkt. No. 1-19 at 13).

         In March, 1990, nearly twenty years after Layne wrote his memorandum, MSHA issued an investigation report, stating in pertinent part:

. . . [t]he ventilation along the Main West headings was inadequate overall, and most probably non-existent in some areas between 1 South and 4 North. On the day before the explosion . . . methane accumulated to about four percent on the right side of the 7 South section for a distance of approximately 1, 000 feet out by the working section because of inadequate ventilation and the lack of sufficient ventilation controls . . . and the FEMCO Supervisory Control (fan monitoring and mine power cutoff system) was not operating properly at the time the explosion occurred, as mining operations continued at the face after the explosion.


         Although the Plaintiffs acknowledge that they became aware of Layne's memorandum sometime in 2008, they allege that it was not until June 9, 2014, that they learned that the chief electrician at the Mine, Alex Kovarbasich (“Kovarbasich”), was the person who had rendered the FEMCO alarm on the Mod's Run fan inoperable.[1] Thus, they claim that, from November 20, 1968 until June 14, 2014, they never knew the identity of the person responsible for rendering the fan inoperable, nor could they have discovered his identity through the exercise of reasonable diligence. Further, they contend that neither Kovarbasich nor CCC ever disclosed that the Mod's Run fan was “intentionally rendered inoperable by mine management.” Id. at 14.

         B. Procedural Background

         On November 6, 2014, the Plaintiffs and class representatives, Michael D. Michael, as the Administrator of the Estate of Jack D. Michael, and Judith A. Kuhn, as the Administratrix of the Estate of Paul F. Henderson (collectively “Plaintiffs”), brought suit in the Circuit Court of Marion County, West Virginia “on behalf of a class of the estates of the seventy-eight (78) coal miners, ” against CCC and Albert Marano, Sheriff of Harrison County (“Sheriff”), as Administrator of the Estate of Kovarbasich, who had died on August 3, 1992. The complaint alleges one count of “fraud, concealment and nondisclosure.” Id. at 19.

         On December 11, 2014, CCC removed the case to this Court based on diversity jurisdiction. It argued that the Plaintiffs had fraudulently joined Kovarbasich to destroy diversity, (dkt. no. 1), and that the Harrison County Commission had improperly appointed Sheriff Marano as Administrator of the Kovarbasich Estate. It contended that the Estate, which had been closed since April 25, 1994, should never have been reopened. It also argued that Kovarbasich was not a proper defendant because any claims against him were barred by the statute of limitations and the doctrine of laches. Id.

         Pursuant to Fed.R.Civ.P. 12(b)(6), CCC moved to dismiss the suit against it on December 17, 2014, on the basis that the Plaintiffs' claims were barred by the statute of limitations. (Dkt. No. 4). Shortly after that, the Plaintiffs filed a motion to remand the case to the Circuit Court of Marion County. They denied that Kovarbasich had been fraudulently joined, or that their claims were barred by the statute of limitations. They also moved to stay consideration of CCC's motion to dismiss until after the Court ruled on their motion to remand. (Dkt. No. 10).

         On February 9, 2015, while the parties' motions were pending, the Plaintiffs moved to “Preserve Evidence and Promptly Perpetuate the Testimony of Leonard Sacchetti and Request Immediate Hearing.” (Dkt. No. 22). The motion asserted that Leonard Sacchetti (“Sacchetti”), a former electrician at the Mine, had personal knowledge of the identity of the individual who had bypassed the FEMCO alarm on the Mod's Run fan in 1968. Because Sacchetti was ninety years old, the Plaintiffs sought an order authorizing them to promptly take his videotaped deposition. The Court granted the motion and ordered that, in recognition of Sacchetti's advanced age, the parties work together to establish parameters for the deposition.

         Shortly after Sacchetti's deposition, on April 6, 2015, the Plaintiffs filed a motion to “Preserve Evidence and Promptly Perpetuate the Testimony of Larry Layne and Request Immediate Hearing.” (Dkt. No. 57). They asserted that Layne knew the identity of the person who had reported to him that someone had bridged the Mod's Run fan. As they had when seeking Sacchetti's deposition, the Plaintiffs maintained that, because of Layne's advanced age (80 years old at the time), it was imperative to promptly secure his testimony. On April 10, 2015, Magistrate Judge Kaull permitted the Plaintiffs to depose Layne on a date certain more than 180 days from the entry of his order, which would allow them time to initiate any process required under 29 C.F.R. §§ 2.20 et seq.[2](Dkt. No. 57 at 5). In addition, he authorized the defendants to conduct discovery of certain enumerated categories of information relevant to the deposition of Layne. Id.

         Also on April 10, 2015, after it learned that the Circuit Court of Harrison County was reviewing CCC's appeal of the County Commission's appointment of the Sheriff as Administrator of Kovarbasich's Estate, the Court stayed a ruling on the pending motions, noting that, in the interests of federalism, comity, and judicial economy, the surest way to avoid “the possibility of inconsistent adjudications and unnecessary entanglement between the federal and state court systems in West Virginia” was to stay any ruling on the motion to remand pending a decision from the Supreme Court of Appeals of West Virginia (“Supreme Court of Appeals”). (Dkt. No. 56 at 3-4).

         During the stay, on July 31, 2015, the Plaintiffs sought leave to amend their complaint in order to add Sacchetti as a defendant. (Dkt. No. 64). They contended that they had only become aware of his role in bridging the Mod's Run fan on April 3, 2015. CCC opposed the motion, contending that, in “direct and intentional violation of this Court's April 10, 2015 Order [limiting discovery], ” the Plaintiffs had met with Layne on April 3, 2015, and had secured his affidavit.[3] (Dkt. No. 68 at 2). In CCC's view, because Plaintiffs' motion for leave to amend rested solely on an improperly obtained affidavit, the Court should strike it as improper. Id. Alternatively, CCC asked the Court to strike Layne's affidavit and any reference to it from the motion to amend, and to afford the affidavit no consideration in deciding that motion. Id. Finally, it sought to prohibit the Plaintiffs from introducing Layne's affidavit or any testimony from it into evidence in the case. Id.

         The Court referred these motions to Magistrate Judge Kaull, who concluded that the Plaintiffs had not violated any court order or 29 C.F.R. §§ 2.20, et seq.(Dkt. No. 97 at 7-10). Accordingly, he denied CCC's attempt to strike Layne's affidavit or testimony. Id. at 10. As to the Plaintiffs' motion for leave to amend their complaint, Magistrate Judge Kaull indicated he would address that issue and CCC's objections in a forthcoming R&R. Id.

         On September 29, 2015, Magistrate Judge Kaull entered an R&R that recommended the Court deny the Plaintiffs' motion for leave to amend the complaint. (Dkt. No. 99). It also concluded that, despite having characterized their complaint as one for fraud, the Plaintiffs actually had alleged claims for wrongful death and deliberate intent, both of which have a two-year statute of limitations. Id. at 13-15. It further concluded that, as to the claims against Sacchetti, neither the discovery rule nor the fraudulent concealment doctrine tolled the statute of limitations because neither had been available in wrongful death actions in 1968.[4] Id. at 21. Because the statute of limitations barred any claim against Sacchetti, the R&R recommended that the Court deny, as futile, the Plaintiffs' motion for leave to add him as a defendant. Id. at 21, 39.

         On September 30, 2015, the Court stayed all proceedings in this case pending a ruling by the Circuit Court of Harrison County on CCC's appeal from the Harrison County Commission's decision to reopen the Kovarbasich Estate. (Dkt. No. 100). Two days later, Circuit Court Judge John Lewis Marks vacated and reversed the Commission's decision, and ordered that the Estate be re-closed. Judge Marks also denied the Plaintiffs' motion to stay his order pending their appeal to the Supreme Court of Appeals. After this quick turn of events prompted the Court to lift its stay in the case on October 2, 2015, the Plaintiffs filed objections to Magistrate Judge Kaull's recommendation that their complaint pled claims for wrongful death and deliberate intent, not fraud. (Dkt. No. 106). They contended that their claim was for fraud, and also argued that, even if their complaint was construed to state claims for wrongful death and deliberate intent, the statute of limitations on those claims had been tolled by both the discovery rule and fraudulent concealment doctrine. Id. In response, CCC contended that the Court should adopt the R&R. (Dkt. No. 151).

         Based on the closure of the Kovarbasich Estate, Sheriff Marano and CCC moved to dismiss the Estate as a party to this action. (Dkt. Nos. 118 and 122). The Plaintiffs, however, argued that the Court should not decide that motion prior to deciding their motion to remand, and that, because they were in the process of appealing Judge Marks's order, it should stay the case in its entirety pending a ruling from the Supreme Court of Appeals on the re-closure of the Estate. (Dkt. No. 121). The Court agreed and stayed all proceedings pending a decision from the Supreme Court of Appeals. (Dkt. No. 124).

         On March 8, 2016, the Plaintiffs moved to lift the stay on a limited basis in order to depose Layne, noting that the parties had exchanged discovery relevant to Layne's knowledge of the incidents, and their concern about his advanced age. (Dkt. No. 125). CCC opposed lifting the stay, because it was waiting for the DOL to release documents it needed to properly depose Layne. (Dkt. No. 127). The Court denied the motion to lift the stay on March 10, 2016. (Dkt. No. 130).

         On November 10, 2016, the Supreme Court of Appeals affirmed Judge Marks's decision to re-close the Kovarbasich Estate. In re: Estate of Alex Kovarbasich, No. 15-1032, 2016 WL 6651583 (W.Va. 2016). Following that, the Court lifted its stay and scheduled a status conference with the parties. (Dkt. No. 139). During that conference, it denied the motion to remand, granted the motion to dismiss the Estate of Kovarbasich, and permitted the parties to proceed with Layne's deposition and other limited discovery. (Dkt. No. 141). The Court also found that none of that discovery would impede its ability to rule on Plaintiffs' objections to the R&R and CCC's motion to dismiss. Id.

         Finally, as a result of a dispute between the parties about Layne's deposition, on March 3, 2017, the Court ordered that the deposition should proceed, and Layne was deposed on March 8, 2017. (Dkt. No. 158).


         A. Fed.R.Civ.P. 12(b)(6) Motion to Dismiss

         In reviewing the sufficiency of a complaint, a district court “‘must accept as true all of the factual allegations contained in the complaint.'” Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th Cir. 2007) (quoting Erickson v. Pardus, 551 U.S. 89, 94 (2007)). However, while a complaint does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than mere labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Indeed, courts “are not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986). In considering whether the facts alleged are sufficient, “a complaint must contain ‘enough facts to state a claim to relief that is plausible on its face.'” Anderson, 508 F.3d at 188 (quoting Twombly, 550 U.S. at 547).

         “A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). “But in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint, the defense may be reached by a motion to dismiss filed under Rule 12(b)(6), ” so long as “all facts necessary to the affirmative defense ‘clearly appear[] on the face of the complaint.'” Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (quoting Richmond, Fredericksburg & Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993)).

         B. Amendment Pursuant to Fed.R.Civ.P. 15

         Under the federal civil rules, a plaintiff may amend a complaint “once as a matter of course” within either 21 days after serving the complaint, or 21 days after service of a responsive pleading or a motion under Rule 12(b), (e), or (f), whichever is earlier. Fed.R.Civ.P. 15(a)(1). “In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave. The Court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2).

         Although granting or denying a motion to amend is within the discretion of the Court, Scott v. Family Dollar Stores, Inc., 733 F.3d 105, 121 (4th Cir. 2013), the Fourth Circuit has interpreted Rule 15(a)(2) to require that “leave to amend a pleading should be denied only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would have been futile.” Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)); See also Edwards v. City of Goldsboro, 178 F.3d 231 (4th Cir. 1999).

         Leave to amend is futile when the amended complaint would not survive a motion to dismiss, Perkins v. United States, 55 F.3d 910, 917 (4th Cir. 1995), or “when the proposed amendment is clearly insufficient or frivolous on its face.” Johnson, 785 F.2d at 510; Burns v. AAF-McQuay, Inc., 980 F.Supp. 175, 179 (W.D. Va. 1997) (noting that proper standard of review when amendment is challenged on grounds of futility is whether the proposed amendment states a claim upon which relief can be granted). When assessing futility, “a district court may look to ‘substantive or procedural considerations.'” Jones v. HSBC Bank USA, N.A., 444 Fed.Appx. 640, 643 (4th Cir. 2011) (quoting Davis v. Piper Aircraft, 615 F.2d 606, 613 (4th Cir. 1980)).


         CCC contends that the Plaintiffs' objections to the R&R simply reiterate arguments previously addressed by Magistrate Judge Kaull. The issues that are dispositive of the recommendation to deny the Plaintiffs leave to amend their complaint to add Sacchetti, however, are also dispositive of CCC's motion to dismiss, which was not the subject of the R&R. Therefore, because Plaintiffs' objections relate to issues that are germane to both the R&R and the motion to dismiss, the Court will review de novo the R&R, the parties' pleadings, and the applicable case law.

         Notably, at the outset, although the Plaintiffs label their case as one for fraudulent concealment, Magistrate Judge Kaull rejected that argument, finding they had pled a claim for wrongful death, to which the two-year statute of limitations applied. Because neither the discovery rule nor the doctrine of fraudulent concealment applied to wrongful death actions in 1968, he recommended that the Court deny Plaintiffs' motion to amend as futile. In their objections, the Plaintiffs argue that, because the Supreme Court of Appeals later extended the discovery rule and fraudulent concealment doctrine to wrongful death actions, the Court should retroactively apply them in this case.

         CCC contends that, even if retroactively applied, the statute of limitations would still bar the Plaintiffs' wrongful death claim. It also argues that any claim against Sacchetti would fail because he owed no duty of disclosure to the Plaintiffs.

         For the reasons that follow, the Court GRANTS CCC's motion to dismiss the claims against it, and DENIES the Plaintiffs' motion for leave to add Sacchetti as a defendant as such an amendment would be futile.

         A. The Nature of the Plaintiffs' Claims

         Magistrate Judge Kaull determined that the Plaintiffs' complaint alleged claims of wrongful death or deliberate intent. At common law, there was no cause of action for wrongful death. Thus, “the right or cause of action for wrongful death, if maintainable, exists under and by virtue of the provisions of the wrongful death statute . . . .” Baldwin v. Butcher, 184 S.E.2d 428, 429 (W.Va. 1971); see also Miller v. Romero, 413 S.E.2d 178, 181, (W.Va. 1991) overruled in part, Bradshaw v. Soulsby, 558 S.E.2d 681 (2001) (“In Baldwin . . . we held that no right of action for wrongful death existed separate and apart from the wrongful death statute.”). West Virginia's wrongful death statute, codified at W.Va. Code § 55-7-5 and § 55-7-6, provides for who may bring such a suit, the amount and distribution of damages, and the period of limitation for commencing such an action.

         Here, Plaintiffs assert that, due to CCC and Sacchetti's fraudulent concealment, they were unable to discover and file a wrongful death action on a timely basis. (Dkt. No. 1-19 (“Defendants deprived plaintiffs of their right to obtain relief against defendants under West Virginia's wrongful death statute.”)). They contend that, “[p]ursuant to W.Va. Code § 55-7-6 (1967), ” they are entitled to $110, 000 per deceased coal miner, the maximum recovery allowed under the statute in 1968. Id. at 56.

         The Court agrees that the Plaintiffs' claims sound in wrongful death. An allegation of fraud that prevents the bringing of a wrongful death suit can hardly be said to exist “separate and apart from the wrongful death statute.” Miller, 413 S.E.2d at 181. Indeed, any fraud claim in this case is no more than a thinly veiled argument in support of Plaintiffs' contention that the two-year limitation period regarding wrongful death actions should be tolled based on fraudulent concealment. Nevertheless, tracking Magistrate Judge Kaull's R&R, the Court will consider all claims alleged or potentially alleged in the complaint.

         B. ...

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