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Unser v. Prepared Insurance Company Fourth-Party

Supreme Court of West Virginia

April 7, 2017

Bruce Unser and Holly Unser Third-Party Plaintiffs Below, Petitioners
v.
Prepared Insurance Company Fourth-Party Defendant Below, Respondent

         (Fayette County 14-C-84)

          MEMORANDUM DECISION

         Petitioners Bruce and Holly Unser (hereinafter "petitioners"), by counsel Tim C. Carrico, appeal the October 5, 2015, order of the Circuit Court of Fayette County granting respondent Prepared Insurance Company's (hereinafter "respondent") motion to dismiss the fourth-party complaint for lack of personal jurisdiction. Respondent appears by counsel, Peter T. DeMasters. Petitioner Bruce Unser filed suit against American-Canadian Expeditions, Ltd. (hereinafter "ACE") for injuries suffered by his minor daughter; ACE filed a third-party complaint against petitioners, who sought coverage and a defense under their homeowners' policy with respondent. Respondent denied coverage and petitioners filed a fourth-party declaratory judgment action against respondent arising out of its denial of coverage. The circuit court found that respondent, a Florida corporation, entered into the subject insurance contract in Florida with petitioners, who are Florida residents. Accordingly, the circuit court found that neither the long-arm statute nor due process permit the exercise of personal jurisdiction over respondent for purposes of the fourth-party declaratory judgment action.

         This Court has considered the parties' briefs and the record on appeal. The facts and legal arguments are adequately presented and upon consideration of the standard of review, the briefs, and the record presented, the Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the circuit court's order is appropriate under Rule 21 of the West Virginia Rules of Appellate Procedure.

         I. Factual and Procedural History

         In September 2011, petitioners, residents of the State of Florida, contracted with respondent, an insurance company incorporated and principally doing business in the State of Florida, for homeowner's insurance coverage that included a provision for liability coverage. In June 2012, petitioners' daughter was riding a bicycle on an unpaved road located on ACE's property located in Fayette County, West Virginia. Petitioners claimed that ACE encouraged bicycling on its property but that there were no warning signs posted regarding the road conditions on the section of roadway where their daughter rode her bicycle. Petitioners claimed that, as a result of the roadway conditions, their daughter lost control of her bicycle at an intersection on the roadway, crashed into a tree, and was injured. Following their daughter's accident, petitioner Bruce Unser filed suit, on his daughter's behalf, against ACE. ACE brought a third-party complaint against petitioners alleging breach of contract, indemnification, [1] and contribution based on a theory of negligent supervision. Petitioners sought defense and coverage for the third-party complaint under their homeowner's insurance policy with respondent.

         Respondent issued a letter to petitioners denying defense and coverage under the homeowner's insurance policy.[2] Thereafter, petitioners filed a fourth-party declaratory judgment action to enforce their rights under the homeowner's insurance policy. Respondent moved to dismiss petitioners' fourth-party complaint arguing that the circuit court lacked personal jurisdiction over respondent. The circuit court found that personal jurisdiction did not lie against respondent under the long-arm statute nor would such an exercise of jurisdiction comport with federal due process given that the policy was issued by a Florida company, to Florida residents, to cover a risk of loss located in Florida. The circuit court made the dismissal order immediately appealable and this appeal ensued.

         II. Standard of Review

         This Court has held that "[a]ppellate review of a circuit court's order granting a motion to dismiss a complaint is de novo." Syl. Pt. 2, State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995). With respect to a nonresident defendant's motion to dismiss for lack of personal jurisdiction, we have held that

"[w]hen a defendant files a motion to dismiss for lack of personal jurisdiction under W.Va. R. Civ. P. 12(b)(2), the circuit court may rule on the motion upon the pleadings, affidavits and other documentary evidence or the court may permit discovery to aid in its decision. At this stage, the party asserting jurisdiction need only make a prima facie showing of personal jurisdiction in order to survive the motion to dismiss. In determining whether a party has made a prima facie showing of personal jurisdiction, the court must view the allegations in the light most favorable to such party, drawing all inferences in favor of jurisdiction. If, however, the court conducts a pretrial evidentiary hearing on the motion, or if the personal jurisdiction issue is litigated at trial, the party asserting jurisdiction must prove jurisdiction by a preponderance of the evidence." Syllabus point 4, State ex rel. Bell Atlantic-West Virginia, Inc. v. Ranson, 201 W.Va. 402, 497 S.E.2d 755 (1997).

Syl. Pt. 2, Bowers v. Wurzburg, 202 W.Va. 43, 501 S.E.2d 479 (1998).

         III. Discussion

         In their sole assignment of error, petitioners assert that the circuit court erred in finding that it lacked personal jurisdiction over respondent. In short, petitioners maintain that respondent committed acts which bring it under the long-arm statute[3] and that respondent s actions give rise to the "minimum contacts" necessary to comport with federal due process. In that regard, this Court has recently articulated a two-part test to determine whether a circuit court has personal jurisdiction over a foreign corporation or nonresident:

A court must use a two-step approach when analyzing whether personal jurisdiction exists over a foreign corporation or other nonresident. The first step involves determining whether the defendant's actions satisfy our personal jurisdiction statutes set forth in W.Va. Code, 31-1-15 [Repl. Vol. 2015][4] and W.Va. Code, 56-3-33 [Repl. Vol. 2012]. The second step involves determining whether the defendant's contacts with the forum state satisfy federal due process."

Syl. Pt. 3, State ex rel. Ford Motor Co. v. McGraw,237 W.Va. 573, 788 S.E.2d 319 (2016) (citations omitted) ...


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