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Tri-State Pipeline, Inc. v. Steorts

Supreme Court of West Virginia

May 17, 2019

Tri-State Pipeline, Inc., Defendant/Third-Party Plaintiff Below, Petitioner
v.
Jason Steorts, Individually; and Steorts Homebulders, LLC, Third-Party Defendant Below, Respondent

          Kanawha County 13-C-2324

          MEMORANDUM DECISION

         Petitioner Tri-State Pipeline, Inc. ("Tri-State"), appeals the January 31, 2018 order of the Circuit Court of Kanawha County, West Virginia, granting Respondents Jason Steorts's, individually, and Steorts Homebuilders, LLC's (collectively "Respondents") motions for summary judgment. The circuit court found Tri-State's claims were barred under principles of issue preclusion in light of a prior arbitration.

         This Court has considered the parties' briefs, their oral arguments, and the record on appeal.[1] Upon review, the Court discerns no substantial question of law and no prejudicial error. Consequently, a memorandum decision affirming the order of the circuit court is the appropriate disposition pursuant to Rule 21 of the West Virginia Rules of Appellate Procedure.

         Tri-State performed excavation work at Rockcrest Pointe Subdivision in South Charleston, West Virginia, pursuant to a contract with Skaff Family Limited Partnership ("Skaff"). During this project, Respondents were on site building several homes at the subdivision. When performing excavation work at the subdivision, Tri-State dumped fill dirt onto nearby property owned by Ridgewood Pool ("Ridgewood") that caused a landslide and extensive property damage. Skaff compensated Ridgewood and eventually purchased this property.

         In December 2013, Skaff filed suit against Tri-State and asserted claims of negligence and breach of contract. Skaff sought to recover $251, 948 for remediation of slips, as well as other damages, in connection with Tri-State dumping fill dirt on the Ridgewood property. Tri-State filed a third-party complaint against Respondents and asserted that Mr. Steorts, acting as an agent of Skaff, negligently directed it to dump fill dirt onto the Ridgewood property.

          Pursuant to their contract, Skaff and Tri-State participated in a binding arbitration proceeding in November of 2014. Respondents were not parties to the arbitration, but Mr. Steorts testified at that proceeding that he directed Tri-State to dump fill dirt onto Ridgewood's property so the contractors could level the area to build a playground and common area. Tri-State's project supervisor, James Cooper, testified at length in the arbitration hearing about how Mr. Steorts gave Tri-State specific instructions to deposit fill dirt on the Ridgewood property.[2]

         The arbitrator found that Skaff (through its agent Mr. Steorts) and Tri-State were both negligent in causing the landslide. He reasoned that even if Mr. Steorts told Tri-State to place the fill dirt on the Ridgewood property, Tri-State was partially responsible because the property line was clearly shown on the map provided to Tri-State, and Tri-State's employee who was principally involved in the operation, Mr. Cooper, did not consult the map prior to dumping the fill dirt. The arbitrator reduced the amount of damages Tri-State owed Skaff for the remediation of slips on the Ridgewood property by $125, 974 (half of $251, 948) based on Respondents' actions.

         After the arbitration order was rendered, the circuit court dismissed Skaff's claims against Tri-State in March of 2015.

         In July 2016, Tri-State filed its Second Amended Third-Party Complaint against Respondents and asserted claims of negligence. Tri-State sought to recover $198, 272 in damages it paid to Skaff following arbitration.[3] Respondents filed motions for summary judgment, arguing that Tri-State's claims were precluded by the earlier arbitration.

         The circuit court granted Respondents summary judgment. It held that Tri-State's claims against Respondents were barred by collateral estoppel and/or res judicata. It reasoned that Tri-State was attempting to recoup from Respondents the amount the arbitrator already found to be attributable to its own negligence. The circuit court stated:

Tri-State alleges that Jason Steorts breached certain alleged duties, including a duty to refrain from instructing Tri-State to dump fill dirt on the pool property and/or the duty to inform Tri-State that it was dumping dirt outside of the project boundaries. Importantly, these are the same acts and/or omissions that Tri-State accused Skaff of during the arbitration proceedings with the argument that Jason Steorts served as Skaff's agent and are the same arguments that formed the basis of the Arbitrator's finding that Skaff was comparatively at fault for its claimed losses and damages.

         Tri-State now appeals the circuit court's order granting Respondents summary judgment. "A circuit court's entry of summary judgment is reviewed de novo." Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). Pursuant to Rule 56(c) of the West Virginia Rules of Civil Procedure, summary judgment is proper when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Furthermore, "[s]ummary judgment is appropriate where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party[.]" Syl. Pt. 4, in part, Painter, 192 W.Va. at 190, 451 S.E.2d at 756.

         Tri-State raises six assignments of error on appeal. We begin with assignment of error number five because it is dispositive. Tri-State contends that the circuit court erred in applying collateral estoppel because it did not have a full and fair opportunity to litigate the issues presented in its third-party claims since the issues of Respondents' negligence and/or agency relationship to Skaff were not fully litigated in arbitration. We disagree.

         The doctrine of collateral estoppel-also called "issue preclusion"-is designed "to foreclose relitigation of issues in a second suit which have actually been litigated in the earlier suit even though there may be a difference in the cause of action between the parties of the first and second suit." Syl. Pt. 2, in part, Conley v. Spillers,171 W.Va. 584, 301 S.E.2d 216 (1983) (emphasis added). Ordinarily, collateral estoppel is relied upon by a defendant to preclude a plaintiff from relitigating an issue that has previously been decided adversely to the plaintiff. "When the defendant asserts collateral estoppel against the plaintiff, it is termed 'defensive' because the defendant seeks to defend and bar the plaintiff's cause of action by a prior adverse judgment ...


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