STATE EX REL. WEST VIRGINIA DEPARTMENT OF TRANSPORTATION, DIVISION OF HIGHWAYS, Petitioner,
THE HONORABLE TOD J. KAUFMAN, JUDGE OF THE CIRCUIT COURT OF KANAWHA COUNTY; AND MIKE ENYART & SONS, INC., Respondents.
Kanawha County No. 18-C-868.
petitioner (defendant below), Department of Transportation,
Division of Highways ("Highways"), seeks a writ to
prohibit the Circuit Court of Kanawha County from allowing
the counterclaim filed below by the respondent (defendant and
counter-claimant below), Mike Enyart & Sons, Inc.
("MESI"), to proceed. Highways argues that MESI's
counterclaim violates Highways's sovereign immunity,
well as the doctrine of claim splitting.
Court has considered the parties' briefs, the arguments
of counsel, the appendix record, and the supplemental
appendix record. Upon consideration of the standard for the
issuance of a writ of prohibition, the Court finds that
Highways is not entitled to the extraordinary relief it
seeks. For these reasons, this matter is properly disposed of
through this memorandum decision in accordance with Rule 21
of the West Virginia Rules of Appellate Procedure.
Factual and Procedural Background
3, 2014, MESI entered into a multimillion-dollar contract
with Highways for the construction of the East Beckley Bypass
in Raleigh County. MESI claims it was damaged by
Highways's delay in acquiring certain necessary
rights-of-ways related to the project. Conversely, Highways
contends that problems arose concerning the quality and
timing of MESI's work, as well as MESI's refusal to
acquire an insurance rider unless Highways entered into
Change Order 9. This change order required an additional
payment of $1, 250, 000, which Highways alleges was paid
under duress and served to exacerbate the difficulties
between the parties.
September 13, 2017, Highways exercised its contractual right
by issuing a partial termination of contract for the
convenience of the State. Thereafter, MESI submitted a liquidated
damages termination claim to Highways, which Highways denied.
Highways terminated the remainder of the contract for the
State's convenience on October 8, 2017.
March 28, 2018, MESI filed a notice of claim against Highways
with the West Virginia Legislative Claims Commission
("Claims Commission") for breach of contract and
seeking $5, 651, 661 in damages. Highways filed an answer to
MESI's claim, but did not file a counterclaim. The Claims
Commission scheduled a status conference for July 10, 2018.
9, 2018, Highways filed the instant civil action in the
circuit court against MESI, seeking to recover significant
monetary damages. Highways alleged, inter alia, that MESI
failed to properly construct, install, and place curbs and
signals. Highways further alleged that MESI breached duties
owed to Highways by performing "substandard work in a
dilatory manner[;]" failing to properly complete work
under the contract; and damaging both public and private
property during the course of its work. In addition to these
breach of contract claims, Highways alleged duress, unjust
enrichment, and negligence. On this same day, Highways filed
a motion to stay the proceedings in the Claims Commission on
the basis that there were numerous common issues between the
Claims Commission case and the circuit court action and that
certain issues in the circuit court proceeding would affect
MESI's claim before the Claims Commission.
status conference went forward before the Claims Commission
on July 10, 2018. Due to a scheduling oversight, MESI's
counsel failed to appear. Highways's counsel did appear
and urged a stay or dismissal of MESI's claim. The Claims
Commission dismissed MESI's claim, which was later
reinstated on MESI's motion. The Claims Commission also
granted Highways's motion to stay.
August 22, 2018, MESI filed a motion to dismiss
Highways's action in the circuit court or, in the
alternative, to stay the circuit court action until the
Claims Commission case concluded. MESI asserted in its motion
that it had "brought its case in the proper venue
created by an Act of the Legislature in 2017. . . . [and
that] [t]he Claims Commission has exclusive
jurisdiction" of claims under its contract with
Highways. By letter dated August 28, 2018, the circuit court
directed Highways to file a response to MESI's motion to
dismiss by September 12, 2018, and directed both parties to
submit proposed orders on the motion by that same date.
accordance with the circuit court's directive, on
September 12, 2018, Highways filed a response to MESI's
motion to dismiss/alternative motion to stay and submitted
its proposed order denying MESI's motions, both of which
Highways states it either hand-delivered or faxed that day to
MESI and the circuit court. On that same day, MESI filed a
pleading in the circuit court titled "Answer, Amended
Motion to Dismiss Plaintiff's Complaint, Counterclaim and
Amended Alternative Motion to Stay." It also submitted
its proposed order, providing for its motions to be taken
under advisement for sixty days during which time the parties
were to engage in "all necessary discovery as
efficiently as possible with the objective of preparing this
case for trial." MESI's proposed order further
provided that MESI had properly brought its action before the
Claims Commission; that Highways could have filed a
counterclaim against MESI in the Claims Commission, but did
not; that the circuit court and the Claims Commission have
concurrent jurisdiction over all claims; and that Highways
"waived its constitutional [sovereign] immunity from
having to defend the Counterclaim by filing its Complaint in
this case. See, Syl. Pt. 2, State, by Davis v. Ruthbell
Coal Co., 133 W.Va. 319, 56 S.E.2d 549 (1949)."
MESI's proposed order also provided for a status
conference on a date to be determined by the circuit court.
mailed a copy of its "Answer, Amended Motion to Dismiss
Plaintiff's Complaint, Counterclaim and Amended
Alternative Motion to Stay" and its proposed order to
Highways's counsel, but hand-delivered the same to the
circuit court. Highways's counsel telephoned MESI's
counsel that same day, asking counsel to email her the
documents MESI had filed that day. MESI's counsel did so,
the following day, which is also the day the circuit court
entered MESI's proposed order, as drafted, and scheduled
the status conference for November 16, 2018.
September 25, 2018, Highways filed a motion to dismiss
MESI's counterclaim. Highways asserted, inter alia, that
it had no opportunity to address MESI's counterclaim
before it was filed because the pleading was mailed to
Highways, but hand-delivered to the circuit court; that MESI
seeks a direct judgment in excess of $5.5 million from the
State's treasury; and that the Ruthbell Coal Co.
case relied upon by MESI does not provide any support for the
filing of MESI's counterclaim, which is expressly barred
by the doctrine of sovereign immunity. Highways also sought
reconsideration of the circuit court's order expediting
discovery and trial.
more than two weeks later, on October 11, 2018, Highways
filed a petition for a writ of prohibition and a motion for
an emergency stay in this Court. Highways argued that the
circuit court's September 13, 2018, order "erodes
the protection sovereign immunity affords" Highways and
forces Highways to expend thousands of dollars defending
against MESI's counterclaim. Highways further asserts
that the circuit court had "done nothing" to rule
on Highways's motion to dismiss the ...