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State ex rel. Gallagher Bassett Services, Inc. v. Webster

Supreme Court of West Virginia

June 12, 2019

STATE OF WEST VIRGINIA EX REL. GALLAGHER BASSETT SERVICES, INC., Petitioner
v.
THE HONORABLE CARRIE WEBSTER, JUDGE OF THE CIRCUIT COURT OF KANAWHA COUNTY; ROBIN LUSK; AND OLD DOMINION FREIGHT LINE, INC., Respondents

          Submitted: April 23, 2019

          ORIGINAL PROCEEDING IN PROHIBITION

          Arie M. Spitz, Esq. Kevin A. Nelson, Esq. Dinsmore & Shohl LLP Charleston, West Virginia Counsel for the Petitioner

          James D. McQueen, Jr., Esq. McQueen Davis, PLLC Huntington, West Virginia Christopher J. Heavens, Esq. Heavens Law Firm, PLLC Charleston, West Virginia Counsel for the Respondent Robin Lusk

          Justin M. Harrison, Esq. George E. Chamberlain IV, Esq. Jackson Kelly PLLC Charleston, West Virginia Counsel for Respondent Old Dominion Freight Line, Inc.

         SYLLABUS

         1. "A writ of prohibition will not issue to prevent a simple abuse of discretion by a trial court. It will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds its legitimate powers. W.Va. Code, 53-1-1." Syl. Pt. 2, State ex rel. Peacher v. Sencindiver, 160 W.Va. 314, 233 S.E.2d 425 (1977).

         2. W.Va. Code § 23-2C-21(a) [2009] prohibits a cause of action by an employee against a third-party administrator, or any employee or agent of a third-party administrator, for workers' compensation discrimination.

          Armstead, Justice.

         This case is before the Court on a petition for writ of prohibition. Respondent Robin Lusk worked for Respondent Old Dominion Freight Line, Inc., ("Old Dominion") as a long-haul truck driver. Ms. Lusk was injured at Old Dominion's trucking terminal, and Old Dominion subsequently terminated her. Old Dominion's third-party claims administrator, Petitioner, Gallagher Bassett Services, Inc., ("Gallagher Bassett") denied Ms. Lusk's claim for workers' compensation benefits on behalf of Old Dominion.

         Ms. Lusk sued both Old Dominion and Gallagher Bassett in the Circuit Court of Kanawha County. Gallagher Bassett moved to dismiss Ms. Lusk's claims against it, and Respondent The Honorable Carrie L. Webster, Judge of the Circuit Court of Kanawha County, denied Gallagher Bassett's motion. Gallagher Bassett contends that Judge Webster erred and asks this Court to direct the circuit court to dismiss all of Ms. Lusk's claims against Gallagher Bassett.

         Based on the record before us, the arguments of the parties, and the applicable law, we find that the circuit court exceeded its jurisdiction by failing to dismiss Ms. Lusk's claims against Gallagher Bassett. Accordingly, we grant the writ of prohibition, reverse the circuit court's order denying Gallagher Bassett's motion to dismiss, and remand this case to the circuit court for the entry of an order dismissing Ms. Lusk's claims against Gallagher Bassett.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Robin Lusk and her husband, Kevin Lusk, were long-haul truckers for Old Dominion. Their work took them to California, and on June 16, 2015, they entered Old Dominion's Los Angeles terminal to begin their next haul. When they arrived, Old Dominion's computer system noted their presence and identified the trailers that they were to transport. When the Lusks attempted to connect to their trailers, Ms. Lusk received serious injuries.

         An ambulance transported Ms. Lusk to a California hospital, where she remained until June 22, 2015. On the day Ms. Lusk was released, Mr. Lusk spoke to Old Dominion's terminal manager by phone. According to Ms. Lusk, the manager said that the couple had "falsified the log book," and that both of them were fired.

         The Lusks returned to West Virginia, arriving by car on June 26, 2015. Ms. Lusk immediately checked into a hospital. According to her, this was when she learned that Old Dominion had terminated her health insurance coverage. That same day, she asserts that she spoke to a Gallagher Bassett employee named Cathy Reedy. According to Ms. Lusk, Ms. Reedy took her statement and then promptly informed her that her request for workers' compensation benefits was denied.

         Ms. Reedy, in her capacity as a Gallagher Bassett claims administrator, also communicated this decision to Ms. Lusk in a letter dated June 26, 2015. The letter identifies Old Dominion as the "Client" and appears to have been printed on Gallagher Bassett letterhead. It reports, "Your application for the benefits filed in the above claim is denied. We have determined that your injury is not work related."

         Ms. Lusk challenged the decision to deny her claim. After an expedited hearing on October 9, 2015, the Office of Judges agreed with Ms. Lusk, ruled that her injury was work-related, and determined that her claim was compensable. The Board of Review affirmed the decision of the Office of Judges in March 2016.[1]

         Ms. Lusk sued Old Dominion in Kanawha County Circuit Court on November 16, 2015. In her complaint, she accuses Old Dominion of workers' compensation discrimination, workers' compensation fraud, and defamation. She identifies Ms. Reedy by name, describes their June 26, 2015 conversation, and refers to the June 26, 2015 denial letter. Ms. Lusk alleges, in particular, that Ms. Reedy accused her of "falsif[ying] log book records[.]" As reported by Ms. Lusk, Ms. Reedy said that "according to the Log Book, Kevin [Lusk] . . . was supposed to be in the 'sleeper[, ]' and [Robin Lusk] was supposed to be 'off duty' at the time she was hooking up the trailers, such that neither was logged in as being 'on duty' when [Robin Lusk] was . . . injured." Ms. Lusk denies that she falsified any log-book entries but says that "she freely admitted [during her conversation with Ms. Reedy] that she inadvertently failed to log in as being 'on duty' by forgetting to do so when she began her pre-shift activities." The complaint also contends that Old Dominion's "workers' compensation representatives, acting as employees of [Old Dominion's] third-party administrator, were the agents and servants of [Old Dominion.]"

         Ms. Lusk filed an amended complaint on January 4, 2018. The amended complaint added Gallagher Bassett as a defendant, accusing Gallagher Bassett of workers' compensation discrimination and workers' compensation fraud.[2] The amended complaint alleges that Gallagher Bassett "contract[ed] with . . . Old Dominion . . . to act as a claims administrator for workers' compensation claims" and alleges that "[a]t all times material to this action, . . . Gallagher Bassett's workers' compensation representatives, who were acting as employees of said third-party administrator, were also the agents and servants of . . . Old Dominion[.]" According to the amended complaint, Gallagher Bassett's employees "were either acting within the scope and course of their employment and agency, such that . . . Old Dominion is liable for any wrongful conduct by them . . . [, ] or [they] were acting on their own in a manner contrary to the workers' compensation laws of West Virginia."

         Ms. Lusk appears to have anticipated that the statute of limitations might become an issue for her claims against Gallagher Bassett, and sought to address the issue in her motion for leave to file the amended complaint. The motion alleges that the August 2017 deposition revealed to Ms. Lusk "that Old Dominion did not make the decision to deny compensability . . . and that Gallagher Bassett . . . and its Claims Manager . . ., Cathy Reedy, made the decision based on facts provided by Old Dominion." The motion explains that Ms. Lusk had not previously sought amendment of the complaint because prior to the deposition, Old Dominion had not taken the position that it relied on Gallagher Bassett in making the decision to deny compensability. Gallagher Bassett moved to dismiss all of Ms. Lusk's claims against it pursuant to Rule 12(b)(6) of the West Virginia Rules of Civil Procedure.[3] Gallagher Bassett argued that Ms. Lusk's claims were barred by the two-year statute of limitations and that Gallagher Bassett was not a proper defendant because it was not Ms. Lusk's employer.[4] Ms. Lusk responded that the statute of limitations was tolled by the discovery rule and did not begin to run until she learned from Old Dominion's employee that "Gallagher Bassett apparently had complete independence in administering and making decisions as to the workers' compensation claim[.]" She also contended that "[n]othing in Chapter 23 of the West Virginia Code precludes the application of Persinger [v. Peabody Coal Co., 196 W.Va. 707');">196 W.Va. 707, 474 S.E.2d 887 (1996)] to intentional acts, such as fraud, by a claims administrator[.]" As support for this claim, she quoted W.Va. Code § 23-2C-21 [2009].[5]

         The circuit court considered Gallagher Bassett's motion to dismiss at a hearing on June 28, 2018. The circuit court denied the motion to dismiss in an order entered on August 27, 2018.[6] In denying the motion, the circuit court summarized the parties' arguments and suggested that it might later side with Gallagher Bassett on summary judgment. Indeed, the circuit court noted Gallagher Bassett's argument that Ms. Lusk's oral arguments about the June 26, 2015 letter amounted to "further evidence that Plaintiff knew or should have known of potential claims against Gallagher Bassett more than two years before she filed suit" and observed that "Gallagher Bassett's arguments [that it was not a proper defendant] are extremely persuasive[.]" However, the circuit court was unwilling to grant Gallagher Bassett's motion based on the early stage in the litigation and based on a "belie[f] that public policy must require that Gallagher Bassett be answerable to the jurisdiction of this Court as to Plaintiff's claims." The court also noted "that no case directly addressing this issue [i.e., whether a third-party administrator could be sued for workers' compensation discrimination and fraud] has been decided by the Supreme Court of Appeals."

         Gallagher Bassett filed this petition for writ of prohibition on January 18, 2019, challenging the denial of its motion to dismiss.

         II. STANDARD OF REVIEW

         We have held that "[a] writ of prohibition will not issue to prevent a simple abuse of discretion by a trial court. It will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds its legitimate powers. W.Va. Code, 53-1-1." Syl. Pt. 2, State ex rel. Peacher v. Sencindiver, 160 W.Va. 314, 233 S.E.2d 425 (1977). When a petitioner claims that a circuit court has exceeded its powers, we apply the following test:

(1) whether the party seeking the writ has no other adequate means, such as direct appeal, to obtain the desired relief; (2) whether the petitioner will be damaged or prejudiced in a way that is not correctable on appeal; (3) whether the lower tribunal's order is clearly erroneous as a matter of law; (4) whether the lower tribunal's order is an oft repeated error or manifests persistent disregard for either procedural or substantive law; and (5) whether the lower tribunal's order raises new and important problems or issues of law of first impression.

Syl. Pt. 4, in part, State ex rel. Hoover v. Berger, 199 W.Va. 12, 483 S.E.2d 12 (1996). We have described these factors as "general guidelines" and "a useful starting point[.]" Id. "Although all five factors need not be satisfied, . . . the third factor, the existence of clear error as a matter of law, should be given substantial weight." Id. With these considerations in mind, we turn to Gallagher Bassett's petition.

         III. ANALYSIS

         Gallagher Bassett argues that Ms. Lusk's workers' compensation discrimination claim is barred by W.Va. Code § 23-2C-21(a) [2009] and that both her workers' compensation discrimination claim and her workers' compensation fraud claim are barred by the two-year statute of limitations. Gallagher Bassett contends that a writ of prohibition should issue because it has no other timely means of correcting the circuit court's clearly erroneous decision, and observes that the application of W.Va. Code § 23-2C-21(a) to third-party administrators is a matter of first impression for this Court. We agree that this is a matter of first impression and that W.Va. Code § 23-2C-21(a) imposes clear limits on a claimant's right to maintain certain causes of action against a third-party administrator. We proceed to consider those limits now in light of Ms. Lusk's claims against Gallagher Bassett.[7]

         A. Statutory Immunity

         We begin our analysis of W.Va. Code § 23-2C-21(a) with a review of our rules of statutory construction. This Court has held that in deciding the meaning of a statutory provision, "[w]e look first to [a] statute's language. If the text, given its plain meaning, answers the interpretive question, the language must prevail and further inquiry is foreclosed." Appalachian Power Co. v. State Tax Dep't of W.Va., 195 W.Va. 573, 587, 466 S.E.2d 424, 438 (1995). We have also cautioned that "[a] statute is open to construction only where the language used requires interpretation because of ambiguity which renders it susceptible of two or more constructions or of such doubtful or obscure meaning that reasonable minds might be uncertain or disagree as to its meaning." Sizemore v. State Farm Gen. Ins. Co., 202 W.Va. 591, 596, 505 S.E.2d 654, 659 (1998) (cleaned up). "That the parties disagree as to the meaning or the applicability of [a] provision does not of itself render [the] provision ambiguous or of doubtful, uncertain or obscure meaning." In re Resseger's Estate, 152 W.Va. 216, 220, 161 S.E.2d 257, 260 (1968).

         With these rules of statutory construction in mind, we turn to W.Va. Code § 23-2C-21. Section 21 provides that "[n]o civil action may be brought or maintained by an employee against a . . . third-party administrator, or any employee or agent of a . . . third-party administrator, who violates any provision of this chapter or chapter thirty-three of this code." W.Va. Code § 23-2C-21(a) (emphasis added). Section 21 goes on to set forth in clear, unambiguous language that "administrative fines or remedies[8] . . . are the exclusive civil remedies for any violation of this chapter committed by a . . . third-party administrator or any agent or employee of a . . . third-party administrator." W.Va. Code § 23-2C-21(b) (emphasis added).

         Ms. Lusk has sued Gallagher Bassett for workers' compensation discrimination. This is a statutory cause of action under Chapter 23 of the West Virginia Code, and she alleges that Gallagher Bassett[9] violated W.Va. Code § 23-5A-1 [1978] (barring discrimination "because of [an] . . . employee's receipt of or attempt to receive benefits under this chapter"); W.Va. Code § 23-5A-2 [1982] (barring cancelation of health insurance while an employee "is claiming or is receiving benefits under this chapter for a temporary disability"); and W.Va. Code § 23-5A-3 [1990] (barring termination of "an injured employee while the injured employee is off work due to a compensable injury . . . and is receiving or is eligible to receive temporary total disability benefits").[10]

         Pursuant to our rule of statutory construction set forth above, we hold that the "plain meaning" of W.Va. Code § 23-2C-21(a) prohibits a cause of action by an employee against a third-party administrator, or any employee or agent of a third-party administrator, for workers' compensation discrimination. Because Ms. Lusk accuses Gallagher Bassett, in its capacity as Old Dominion's third-party administrator, of workers' compensation discrimination, we find that this claim against Gallagher Bassett must be dismissed and that the circuit court's refusal to do so was clear error.[11]

         Our law is clear that responsibility for compensability determinations lies with a self-insured employer. "In any claim for benefits under this chapter, the . . . self- insured employer . . . shall determine whether the claimant has sustained a compensable injury . . . and enter an order giving all parties immediate notice of the decision." W.Va. Code § 23-4-1c(a) [2009] (emphasis added); see also W.Va. Code R. § 85-18-11.1 [2008] ("All self-insured employers shall administer their own claims consistent with the provisions of chapter twenty-three of the West Virginia Code and the rules promulgated thereunder." (emphasis added)). Third-party administrators, as the name implies, are third-party entities "hired by self-insured employers to help administer workers' compensation claims[.]" W.Va. Code R. § 85-18-1.1 [2008]; see also, Wetzel v. Emp'rs Serv. Corp. of W.Va., 221 W.Va. 610, 615, 656 S.E.2d 55, 60 (2007). "Self-insured employers may hire third[-]party administrators to administer claims[, ]" and such third-party administrators "shall comply with relevant provisions of chapter[] twenty-three . . . of the West Virginia Code and the rules promulgated thereunder." W.Va. Code R. § 85-18-17 [2008] (emphasis added). However, the ultimate responsibility for compensability decisions lies with the self-insured employer.

         Notably, in her response to the petition for writ of prohibition, Ms. Lusk appears to concede that her workers' compensation discrimination claim is barred by W.Va. Code § 23-2C-21. She writes, "[t]he statute relied upon by Gallagher Bassett, W.[]Va. [Code] §[]23-2C-21(a), . . . expressly states in clear fashion that an employee can not [sic] bring or maintain an action against a . . . third-[party ]administrator . . . under chapter 23 . . . of the West Virginia Code." She contends, however, that Section 21 is unconstitutional because Chapter 23 punishes fraud on the part of claimants while at the same time "protecting those who administer the workers' compensation laws . . . from exposure for acting in a discriminatory manner[.]" Ms. Lusk further asserts, "[T]here is neither a standard applicable to insurers, third-party administrators, or their ...


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