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Martinez v. Asplundh Tree Expert Co.

Supreme Court of West Virginia

June 16, 2017

HELIO MARTINEZ, Petitioner
v.
ASPLUNDH TREE EXPERT CO., Respondent

          Submitted: May 16, 2017

         Certified Questions from the United States District Court for the Northern District of West Virginia

          Allan N. Karlin, Esq Jane E. Peak, Esq. Benjamin J. Hogan, Esq. Allan N. Karlin & Associates Morgantown, West Virginia Counsel for Petitioner

          Joseph U. Leonoro, Esq. Steptoe & Johnson PLLC Charleston, West Virginia Michael J. Moore, Esq. Steptoe & Johnson PLLC Bridgeport, West Virginia Counsel for Respondent.

         SYLLABUS BY THE COURT

         1. "A de novo standard is applied by this Court in addressing the legal issues presented by a certified question from a federal district or appellate court." Syllabus Point 1, Light v. Allstate Ins. Co., 203 W.Va. 27, 506 S.E.2d 64');">506 S.E.2d 64 (1998).

         2. "The presumption is that a statute is intended to operate prospectively, and not retrospectively, unless it appears, by clear, strong and imperative words or by necessary implication, that the Legislature intended to give the statute retroactive force and effect. Syl. pt. 4, Taylor v. State Comp. Comm'r, 140 W.Va. 572, 86 S.E.2d 114 (1955)." Syllabus Point 2, In re Petition for Attorney Fees and Costs: Cassella v. Mylan Pharm., Inc., 234 W.Va. 485, 766 S.E.2d 432 (2014).

         3. "Statutory changes that are purely procedural in nature will be applied retroactively." Syllabus Point 4, Miller v. Smith, 229 W.Va. 478, 729 S.E.2d 807 (2002).

         4. "A statute that diminishes substantive rights or augments substantive liabilities should not be applied retroactively to events completed before the effective date of the statute (or the date of enactment if no separate effective date is stated) unless the statute provides explicitly for retroactive application." Syllabus Point 2, Public Citizen, Inc. v. First Nat. Bank in Fairmont, 198 W.Va. 329, 480 S.E.2d 538 (1996).

          5. "A law is not retroactive merely because part of the factual situation to which it is applied occurred prior to its enactment; only when it operates upon transactions which have been completed or upon rights which have been acquired or upon obligations which have existed prior to its passage can it be considered to be retroactive in application. Syl. pt. 3, Sizemore v. State Workmen's Comp. Comm'r, 159 W.Va. 100, 219 S.E.2d 912 (1975)." Syllabus Point 3, In re Petition for Attorney Fees and Costs: Cassella v. Mylan Pharm., Inc., 234 W.Va. 485, 766 S.E.2d 432 (2014).

         6. West Virginia Code § 55-7E-3, abrogating Syllabus Point 2 of Mason County Board of Education v. State Superintendent of Schools, 170 W.Va. 632, 295 S.E.2d 719 (1982) and its progeny, is a remedial statute that does not impact a vested or substantive right. Accordingly, its provisions are applicable irrespective of when the cause of action accrued or when the claim or suit is filed, thereby imposing an affirmative duty on the part of the plaintiff to mitigate any claim for past and/or future wages and requiring an award, if any, of back pay and front pay to be reduced by the amount of interim earnings or the amount that may be earned with reasonable diligence by the plaintiff.

         7. West Virginia Code § 55-7-9 is a remedial statute that does not impact a vested or substantive right. Accordingly, its provisions are applicable irrespective of when the cause of action accrued or when the claim or suit is filed.

          WALKER, Justice.

         This case is before us on two certified questions from the United States District Court for the Northern District of West Virginia. We consider whether two recently enacted statutes relating to damages - West Virginia Code §§ 55-7-29 and 55-7E-3 - apply in a trial conducted after the effective date of the statutes when the underlying facts in the case occurred prior to that effective date. Finding the two statutes at issue to be remedial, we answer the certified questions in the affirmative.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Petitioner Helio Martinez was employed by Respondent Asplundh Tree Expert Co. ("Asplundh") to perform tree cutting services from 2011 until he was discharged on September 13, 2013. Mr. Martinez is an American citizen originally from Puerto Rico. He worked on a four-person work crew first assigned to work in Pennsylvania but then transferred to work in West Virginia by Asplundh. Mr. Martinez's work crew was comprised entirely of Hispanic individuals and, according to Mr. Martinez, they were treated less favorably than other work crews as they were provided inferior equipment. Moreover, he alleges that at least one member of Asplundh management referred to them as the "Mexican crew" even though none of the crew members were of Mexican descent.

         On September 13, 2013, Asplundh summarily terminated Mr. Martinez's employment on the grounds of theft. Although Mr. Martinez denied any wrongdoing, he was not provided any opportunity to respond to the accusation of wrongdoing. The separation notice documenting the termination was prepared by Mr. Martinez's direct supervisor, Terry McFarlan, and states: "Took our truck to shop, was caught stealing from a Jaflo truck on camera." Mr. Martinez's entire work crew was terminated as a result of the alleged theft of a cell phone charger from the truck of a competitor (Jaflo) parked at a truck repair facility (United Auto).

         Mr. McFarlan and his supervisor, Tim Blankenship, admitted in their depositions that that the video surveillance upon which the decision to fire Mr. Martinez was based did not show him stealing the cell phone charger. Rather, Asplundh now claims that the video surveillance revealed Mr. Martinez was in a position to observe two other crew members steal the cell phone charger. Although counsel for Mr. Martinez requested a copy of the video surveillance within days of the discharge, it disappeared without explanation. Mr. McFarlan suggested in his deposition that the video "erased itself."

         Following his discharge, Mr. Martinez filed a complaint against Asplundh with the West Virginia Human Rights Commission ("Commission"). The Commission subsequently issued a Notice of Right to Sue on December 30, 2014. On January 25, 2015, Mr. Martinez filed a civil action against Asplundh in the Circuit Court of Harrison County alleging that he was wrongfully discharged from employment in violation of the West Virginia Human Rights Act, §§ 5-11-1 through -20 (2013) (the "Human Rights Act"). Mr. Martinez claims that he was unlawfully discriminated against on the basis of race, national origin and/or ancestry.

         On February 25, 2015, Asplundh removed the case to the United States District Court for the Northern District of West Virginia on the basis of diversity pursuant to 28 U.S.C. § 1332 (2012). Prior to trial, the parties jointly moved the district court to stay the case and certify the questions we now consider.

         By order entered on January 1, 2017, the district court certified the following questions to this Court:

1. Does W.Va. Code § 55-7E-3, which abrogates Mason County Bd. of Educ. v. State Superintendent of Sch., 170 W.Va. 632, 295 S.E.2 719 (1982), apply to a wrongful discharge case under the West Virginia Human Rights Act, W.Va. Code § 5-11-9(1), where the plaintiff employee was discharged on September 3, 2013, the effective date of the statute is June 8, 2015, and this case is set for trial after June 8, 2015?
2. Does W.Va. Code § 55-7-29, which limits punitive damage awards, apply to a wrongful discharge case under the West Virginia Human Rights Act, W.Va. Code § 5-11-9(1), where the plaintiff employee was discharged on September 3, 2013, the effective date of the statute is June 8, 2015, and this case is set for trial after June 8, 2015?

         We proceed to consider the issues raised by the certified questions.

         II. STANDARD OF REVIEW

         As we have established, "[a] de novo standard is applied by this Court in addressing the legal issues presented by a certified question from a federal district or appellate court." Syl. pt. 1, Light v. Allstate Ins. Co., 203 W.Va. 27, 506 S.E.2d 64');">506 S.E.2d 64 (1998). We consider the certified questions presented by the district court according to this standard.

         III. DISCUSSION

         To begin, we summarize the arguments advanced by the parties, which are virtually the same for both certified questions. Petitioner argues that responding to the certified questions in the affirmative would impose an impermissible retroactive application of West Virginia Code §§ 55-7-29 and 55-7E-3. Asserting that the law of damages is substantive, Petitioner contends that application of the statutes at issue would impair substantive rights contrary to this Court's prior holding that "[a] statute that diminishes substantive rights or augments substantive liabilities should not be applied retroactively to events completed before the effective date of the statute . . . unless the statute provides explicitly for retroactive application." Syl. Pt. 2, Public Citizen, Inc. v. First Nat. Bank in Fairmont, 198 W.Va. 329, 480 S.E.2d 538 (1996). To hold otherwise, Petitioner states, would be contrary to our observation that "[i]t has been stated repeatedly that new legislation should not generally be construed to interfere with existing contracts, rights of actions, suits, or vested property rights." Mildred L.M. v. John O.F., 192 W.Va. 345, 351 n. 10, 452 S.E.2d 436, 442 n.10 (1994) (citing Landgraf v. USI Film Prod., 511 U.S. 244 (1994)). Petitioner further argues that the statutes at issue are neither procedural nor remedial, and absent contrary language in the legislation, may not be applied retroactively to a case based on a discharge from employment that preceded the statute's effective date of June 8, 2015.

         Conversely, Respondent asserts that a plaintiff does not have a right to damages until they are proven at trial and thus Mr. Martinez had no vested right to unmitigated front pay or punitive damages prior to trial. Respondent relies upon the language of each statute referring to an "award" for its argument that applicability is not triggered until damages are awarded. Consequently, Respondent posits that it is not seeking to apply the subject statutes retroactively. Respondent urges this Court to rely upon our prior holding that "[a] law is not retroactive merely because part of the factual situation to which it is applied occurred prior to its enactment; only when it operates upon transactions which have been completed or upon rights which have been acquired or upon obligations which have existed prior to its passage can it be considered to be retroactive in application." Syl. Pt. 3, Sizemore v. State Workmen's Compensation Comm'r., 159 W.Va. 100, 219 S.E.2d 912 (1975). Respondent requests that "the law in effect on the date of trial be applied in this case" and urges this Court to disregard what it characterizes as a "cloud of confusion" created by Petitioner's retroactivity argument.

         We now address each certified question in turn.

         A. West Virginia Code § 55-7E-3

         The first certified question is based upon West Virginia Code § 55-7E-3, which addresses the recovery of front pay[1] and back pay[2] in employment cases and states:

(a) In any employment law cause of action against a current or former employer, regardless of whether the cause of action arises from a statutory right created by the Legislature or a cause of action arising under the common law of West Virginia, the plaintiff has an affirmative duty to mitigate past and future lost wages, regardless of whether the plaintiff can prove the defendant employer acted with malice or malicious intent, or in willful disregard of the plaintiff's rights. The malice exception to the duty to mitigate damages is abolished. Unmitigated or flat back pay and front pay awards are not an available remedy. Any award of back pay or front pay by a commission, court or jury shall be reduced by the amount of interim earnings or the amount earnable with reasonable diligence by the plaintiff. It is the defendant's burden to prove the lack of reasonable diligence.
(b) In any employment law claim or cause of action, the trial court shall make a preliminary ruling on the appropriateness of the remedy of reinstatement versus front pay if such remedies are sought by the plaintiff. If front pay is determined to be the appropriate remedy, the amount of front pay, if any, to be awarded shall be an issue for the trial judge to decide.

W.Va. Code § 55-7E-3 (2016). The effective date of this statute was June 8, 2015.[3]

         This new article of Chapter 55 also includes articulated findings and a declaration of purpose. According to West Virginia Code § 55-7E-2(a)(3), "the goal of compensation remedies in employment law cases is to make the victim of unlawful workplace actions whole . . . ." W.Va. Code § 55-7E-2(a)(3). Moreover, "[i]n West Virginia, the amount of damages recently awarded in statutory and common law employment cases have been inconsistent with established federal law and the law of surrounding states. This lack of uniformity in the law puts our state and its businesses at a competitive disadvantage." W.Va. Code § 55-7E-2(a)(4). Finally, "[t]he purpose of this article is to provide a framework for adequate and reasonable compensation to those persons who have been subjected to an unlawful employment action, but to ensure that compensation does not far exceed the goal of making a wronged employee whole." W.Va. Code § 55-7E-2(b).

         To answer the certified question presented by the district court, we first examine our precedent relating to the applicability of statutory enactments. We begin with the statutory proposition that "[a] statute is presumed to be prospective in its operation unless expressly made retrospective." W.Va. Code § 2-2-10(bb) (2013). "The presumption is that a statute is intended to operate prospectively, and not retrospectively, unless it appears, by clear, strong and imperative words or by necessary implication, that the Legislature intended to give the statute retroactive force and effect. Syl. pt. 4, Taylor v. State Compensation Comm'r, 140 W.Va. 572, 86 S.E.2d 114 (1955)." Syl. Pt. 2, In re Petition for Attorney Fees and Costs: Cassella v. Mylan Pharm., Inc., 234 W.Va. 485, 766 S.E.2d 432 (2014).

         How statutory amendments apply may be determined by the subject matter of the statute. For example, "[s]tatutory changes that are purely procedural in nature will be applied retroactively." Syl. Pt. 4, Miller v. Smith,229 W.Va. 478, 729 S.E.2d 807 (2002). On the other hand, we have held that "[a] statute that diminishes substantive rights or augments substantive liabilities should not be applied retroactively to events completed before the effective date of the statute (or the date of enactment if no separate effective ...


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