West Virginia: Vicarious Liability of Employers

/in /by West Virginia: Vicarious Liability of Employers

In the state of West Virginia an employer may be held liable for the acts or omissions of his/her employee under three distinct theories: respondeat superior, negligent hiring, and negligent entrustment.

Under the theory of respondeat superior, an employer may be held vicariously liable for tortious acts proximately caused by an employee, as long as those acts are within the scope of employment. In order to prevail under this theory of recovery, a plaintiff must prove that the injury to his person or property results proximately from tortuous conduct of an employee acting within the scope of his employment, and that the act of the employee was done in accordance with the expressed or implied authority of the employer. The scope of the employment is defined as “an act specifically or impliedly directed by the master, or any conduct which is an ordinary and natural incident or result of that act.” An employee who deviates far from his duties can take himself out of the scope of the employment. However, an employee’s willful or malicious act may still be within the scope of employment. See, Griffith v. George Transfer & Rigging, Inc., 157 W. Va. 316, 201 S.E.2d 281 (1973) and Barath v. Performance Trucking, Inc., 188 W. Va. 367, 424 S.E.2d 602 (1992). Moreover, scope of employment is a relative term and requires     a consideration of surrounding circumstances including the duration of the employment, the nature of the wrongful deed, the time and place of its commission, and the purpose of the act. Courtless v. Jolliffe, 203 W.Va. 258, 507 S.E.2d 136(1998).

Finally, in order to establish a claim under the theory of negligent entrustment, a plaintiff must prove that an employer who allows an employee to use a vehicle when the employer knows, or from the circumstances is charged with knowing, that the employee is incompetent or unfit to drive may be liable for an injury inflicted by the employee if the injury was proximately caused by the disqualification, incompetency, inexperience, intoxication or recklessness of the employee. See, Payne v. Kinder, 147 W. Va. 352, 127 S.E.2d 726 (1962).

Delaware: Vicarious Liability of Employers

/in /by Delaware: Vicarious Liability of Employers

Respondeat Superior is the doctrine by which an employer can be held liable for the actions of its employees. This doctrine only applies if the tortious actions of the employee were within the scope of the employment. Generally, the employer is vicariously liable for the actions of the employee (or its agent). Fisher v. Townsend’s, Inc., 695 A.2d. 53 (Del. 1997). Two general rules establish the framework for determining vicarious liability.

First, if the principal is the master of an agent who is a servant, the fault of the agent, if acting within the scope of employment, will be imputed to the master through respondeat superior.

Second, an owner or contractee will not be held liable for the torts of an independent contractor which are committed in the performance of the contracted work. In Delaware, if the principal assumes the right to control the time, manner and method of executing the work, as distinguished from the right merely to require certain definite results in conformity to the contract, a master/ servant relationship has been created. But, if a worker is not subject to that degree of physical control, but subject only to the general control and direction by the contractee, that worker is an independent contractor. Right to control is the central consideration. See also, West v. Flonard 2010 WL 892190 (Del. Super.). The Delaware Supreme Court has recognized that no one rule can be set to determine if a relationship is that of a servant/master or that of an independent contractor, and each case depends on its own facts. The determination is made by the fact finder, usually a jury.

Delaware   recognizes   Section   220   of the Restatement (Second) of Agency as an authoritative source for defining the master- servant relationship. The Restatement (Second) of Agency states that the following non-exclusive “matters of fact” are to be considered in deciding whether the actual tortfeasor is a servant or an independent contractor:

  1. the extent of control, which, by the agreement, the master may exercise over the details of the work;
  2. whether or not the one employed is engaged in a distinct occupation or business;
  3. the kind of occupation, with reference to whether, in   the   locality,   the   work is usually done under the direction of the employer or by a specialist without supervision;
  4. the skill required in the particular occupation;
  5. whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
  6. the length of time for which the person is employed;
  7. the method of payment, whether by the time or by the job;
  8. whether or not the work is part of the regular business of the employer;
  9. whether or not the parties believe they are creating the relation of master and servant; and
  10. whether the principal is or is not in business. Cumpston v. McShane, (internal citations omitted), 2009 Del. Super. LEXIS 191, 5-6 (Del. Super. Ct. May 15, 2009)

The key issue is the level and control one has asserted over an independent contractor. If there is little to no control, there will be good arguments that the employer should not be vicariously liable

 

Respondeat Superior: Updates from the District of Columbia and Virginia

/in /by Respondeat Superior: Updates from the District of Columbia and Virginia

Virginia

Any discussion of employer liability   starts with an understanding of the concept of  respondeat superior. Respondeat superior literally means, “let the master answer” and holds an employer vicariously liable for the torts of its employees. The doctrine of respondeat superior is firmly grounded in Virginia common law.

In Virginia, to recover against an employer under a theory of respondeat superior, the plaintiff must establish: 1) the existence of a employer- employee relationship; 2) that the employee was conducting his employer’s business at the time of the commission of the tort, and; 3) that the employee was acting within the scope of his employment. Master Auto Serv. Corp. v. Bowden, 179 Va. 507, 510 (1942)

To test whether the act was committed under the scope of respondeat superior, there must be proof that, “the service itself, in which the tortious act was done, was within the ordinary course of the employer’s business.” Gina Chin v. First Union Bank, 260 Va. 533, 541 (2000).

Are intentional torts and frolics not included within the scope of employment? Not necessarily! “The test of liability is not the motive of the employee in committing the act complained of, but whether the act was within the scope of the duties of employment and in the execution of the services for which he was engaged.” Tri-State Coach Corp. v. Walsh, 188 Va. 299, 306 (1948)

For example, in Tri-State v. Walsh, the Virginia Supreme Court found a defendant bus company liable for its driver’s physical assault of another motor during a traffic dispute. The Court reasoned that because the driver was engaged in the employer’s business (i.e., driving a bus) at the time of his tortious act, the company could also be held liable.

In contrast, in Davis Cary v. Hotel Rueger, Inc., 195 Va. 980 (1954), the Virginia Supreme Court found that the defendant, a hotel bellman who shot an acquaintance inside the hotel after being confronted about a personal debt, was not acting within the scope of his employment.

What to take away from these holdings? In Virginia, respondeat superior is a specific fact based inquiry. It depends on the three factors listed above, with most emphasis on whether your employee acted within the scope of employment.

*Important Note: Employers are not vicariously liable for the acts of independent contractors. A strong independent contract agreement can prevent liability against an employer in most cases.

District of Columbia

The District also recognizes the doctrine of respondeat superior. Under   this doctrine, an employer may be held vicariously liable for tortious acts caused by an employee, as long as those acts are within the scope of employment.

In order to prevail under this theory of recovery, a plaintiff must prove: (1) a master and servant relationship between employer and employee; (2) that the employee was in the process of his employer’s business at the time of the tort; and (3) that the employee was in the scope of his employment at the time of the tort. The scope of the employment is defined as “incidental” to an employer’s business and done “in furtherance of” the employer’s business.

An employee who deviates far from his duties has taken himself out of the scope of the   employment.   Temporary detour from an employer’s business does not destroy the scope of employment factor, e.g. stopping for gas and/or meals. An intentional tort is an employee’s willful or malicious act that may still be within the scope of employment.

For example, overly aggressive security guards; scope-of-employment limitation pertains to this. Traditional test for scope has been: was the employee motivated at least in part by a desire to serve the employer? Another test is foreseeability – whether the employee’s conduct should fairly have been foreseen from the nature of the employment and the duties relating to it.

Similarly, it is a fact intensive inquiry that depends in large part whether the employee was in furtherance of the employer’s business. It is important to note that as in Virginia, employers are not vicariously liable for the acts of independent contractors. A strong independent contract agreement can prevent liability against an employer in most cases.

 

 

 

Respondeat Superior and Vicarious Liability: Maryland Update

/in /by Respondeat Superior and Vicarious Liability: Maryland Update

In Maryland, plaintiffs may sue an employer for the negligence of an   employee, if the employee was acting within the “scope and course” of his or her employment at the time of the employees negligence. Generally, determining whether the employee was in the scope and course of employment requires a detailed factual inquiry. To be within the scope and course of employment, the employee’s actions must be: those the employee is employed to perform, occur in a time and place reasonably associated with the actor’s employment, and done to serve the employer in the furtherance of their business.

On each end of the spectrum, are examples of actions of an employee that are clearly outside the course and scope of employment, and   actions   that   are   clearly within the course and scope of employment. For example, in Tall ex rel Tall v. Board of School Commissioners, a Baltimore City public school system teacher physically assaulted a nine year old child with disabilities during school hours and on the school premises. The teacher’s actions were “unprovoked, highly unusual, and quite outrageous,” and the court found that the teacher’s actions were willful and malicious. For those reasons, despite satisfying the other elements for actions to be within the scope and course of employment, the court found that the teacher’s actions were well beyond his expected activities, and in no way furthered his employer’s interests. Accordingly, the school system was not vicariously liable for the teacher’s actions.

Between the obvious deviations from the course and scope of employment and the situations in which an employee is clearly within the scope of employment, there are various factors courts apply to determine vicarious liability of employers. In Barclay v. Briscoe, a longshoreman was driving home from a twenty-two hour shift, fell asleep at the wheel, and caused a head-on collision. The court agreed that it was foreseeable that the employee might fall asleep on his drive home after a long shift working for the employer. However, foreseeability does not create a duty. In order to hold the employer liable for the off-duty actions of the employee, the court held that there must be some preexisting special relationship between the employer and the plaintiff, or that the employer had the ability and authority to control the off- duty actions of the employee. Barclay follows the consistent holdings in Maryland that employers are generally not liable for the actions of their employees who are commuting to or from work.

The ability and authority to control the actions of an employee are often involved in determining the scope and course of employment. In Drug Fair of Maryland, Inc. v. Smith, a drugstore clerk, usually responsible for restocking shelves and assisting customers, physically detained and attempted to remove a customer from the store. The evidence showed that the clerk was asked to apprehend shoplifters on four to five previous occasions, and that on the date in question, the store manager on duty requested the apprehension and removal of the plaintiff. The employer argued that some of the collateral physical altercations that occurred between the employee and plaintiff during the apprehension were not the type authorized by the employer. Despite there being no express authorization or policy regarding the detention of customers, the court found it dispositive that the clerk was explicitly directed by his employer to detain the plaintiff. Because the actions that occurred were one “continuous sequence,” the court found the entire altercation to be implicitly authorized by the employer.

Generally, whether or not an employee is within the scope and course of employment is a highly fact specific question, and more often than not, is a question for a jury. However, Maryland courts consistently apply the same factors in evaluating the issue. These factors include the location and time of the allegedly tortious actions, whether the time and location are reasonably related to the employee’s employment, whether the actions are the type the employee was hired to perform, and whether the actions are reasonably calculated to serve the employer. If those factors are answered affirmatively, employers will often be held liable for the acts of their employees.

 

 

 

Overview of Uninsured and Underinsured Motorist Insurance Coverage Litigation in Maryland

/in /by Overview of Uninsured and Underinsured Motorist Insurance Coverage Litigation in Maryland

Pursuant to Maryland’s Insurance Code, unless the policy holder waives coverage, every motor vehicle insurance policy written in the state of Maryland is required to include options for uninsured motorist (“UM”) and underinsured motorist (“UIM”) coverage. As indicated above, the policy purchaser is permitted by statute to waive said coverage, but policy writers may not refuse to underwrite a policy if the purchaser refuses to waive the UM or UIM coverage.

 UM coverage applies when the policy holder is injured by a third-party tortfeasor who does not have insurance coverage. In that case, the policy holder is entitled to recover from her insurance carrier the damages she could have recovered from the third-party tortfeasor. The recovery is, of course, limited to the UM policy limits under the policy. UIM coverage applies when the insurance carrier’s policy holder is injured by a party that does have insurance coverage, but the policy limits are not sufficient to make the injured party whole. In that case, assuming coverage has not been waived, the injured party is entitled to recover the remaining damages from her insurance carrier (again, up to policy limits).

 Often, when the policy holder brings suit against the third-party tortfeasor, if the plaintiff believes that the tortfeasor’s insurance coverage is insufficient, he will sue his own insurance carrier in the same action to recover UM/UIM benefits. This is not required, as Maryland statute expressly permits a subsequent action to recover UM/UIM benefits. The statute of limitations to bring a UM/UIM claim against the insurance carrier does not begin to run until: (1) the policy holder receives the full policy limits from the tortfeasor; or (2) the insurance carrier denies coverage. Therefore, potential UM/UIM claimants might have much more than the standard three years to file a UM/UIM claim in Maryland.

When and if a UM/UIM claim is actually made, it is contingent on the plaintiff proving she is entitled to damages that cannot be compensated by the tortfeasor. For uninsured motorists, this is relatively straightforward, as there is no coverage available. For a underinsured motorist, this requires a showing of proof (from a litigation standpoint). In order to be entitled to coverage, the Plaintiff must establish that she is entitled to damages above and beyond the policy limits received from the tortfeasor. If she is successful, she is entitled to recover only the damages in excess of the tortfeasor’s insurance policy.

 Whether or not the policy holder ever makes a claim for UM/UIM coverage is almost entirely dependent on the availability and limits of the third-party tortfeasor’s insurance coverage.

Self-Driving Cars: Are Negligent Causes of Action Soon to Be a Thing of the past in Motor Vehicle Accidents?

/in /by Self-Driving Cars: Are Negligent Causes of Action Soon to Be a Thing of the past in Motor Vehicle Accidents?

With so many car manufacturers announcing recently their plans of introducing self-driving cars into the marketplace, one has to wonder how that will affect liability when there is a motor vehicle accident involving one of these self-driving cars. In West Virginia, most, if not all, motor vehicle accident cases are premised on the negligent operation of a vehicle that led to the accident.  However, with computers and machines now in the driver seat (pun intended), new theories of liability will most certainly arise in these cases, with one being strict liability based on a defect with the self-driving car.

In a regular motor vehicle accident, a plaintiff most often asserts negligence as his or her cause of action, which requires the plaintiff to prove: “(1) [a] duty which the defendant owes him; (2) [a] negligent breach of that duty; (3) injuries received thereby, resulting proximately from the breach of that duty;” and (4) damages.  Webb v. Brown & Williamson Tobacco Co., 121 W.Va. 115, 118, 2 S.E.2d 898, 899 (1939) (citations omitted).  Moreover, the Supreme Court of Appeals of West Virginia has stated that negligence is defined as “what a reasonable and prudent person would ordinarily have done under the circumstances . . . .”  Honaker v. Mahon, 210 W. Va. 53, 58, 552 S.E.2d 788, 793 (2001) (emphasis added).  Dating all the way back to 1914, the Supreme Court of Appeals of West Virginia has held that an operator of a motor vehicle must operate said motor vehicle with reasonable care and has applied a negligence cause of action when the operator fails to act with such reasonable care.  Deputy v. Kimmell, 73 W. Va. 595, 80 S.E. 919, 920 (1914).  However, by now removing a person from the driver seat from a motor vehicle, a negligence cause of action does not appear to be the appropriate cause of action for measuring the liability of a self-driving car because a computer and/or machine cannot act as a reasonable and prudent person would have under the same or similar circumstance.  Thus, plaintiffs will most likely have to turn to the theory of strict liability for product defects.

 In West Virginia, strict liability based on an injury caused by a product has three components that create the separate causes of action: (1) a defect of the product; (2) negligence of the manufacturer making or altering the product; and (3) a breach of the warranty covering the product.  Syl. Pt. 6, Ilosky v. Michelin Tire Corp., 172 W. Va. 435 307 S.E.2d 603 (1983). A defective product is one that is not reasonably safe for its intended purpose and can be proven to be defective either by showing that: (1) there was a manufacturing defect; (2) there was a design defect; or (3) there was a use defect caused by inadequate warnings, instructions, or labels. Morningstar v. Black & Decker Mfg. Co., 162 W. Va. 857, 888-89, 253 S.E.2d 666, 682-83 (1979).  A design defect is one in which the entire line of products was designed in such a way that it makes the product potentially harmful and a safer alternative design existed at the time the product was designed.  Id. at 888-89, 682-83. A product contains a manufacturing defect if the product differs from the manufacturer’s design or specifications or from other typical units of the same product line.  Id. at 884-85, 681.

Because a person will no longer be operating these self-driving cars, West Virginia trial courts will be hard pressed to assert liability on the person sitting behind the wheel.  Instead, plaintiffs’ attorneys will most likely take the route of attempting to prove a defect with the self-driving car.  Although there will almost certainly be hurdles for plaintiffs to overcome using a cause of action grounded in defective products, such as increased costs of expert witnesses in trying to prove a defect, the rewards of potentially much higher verdicts may outweigh those costs.  Furthermore, by being able to present a negligence claim against the manufacturer, distributor, and/or seller of the self-driving car for failing to use reasonable care in the designing, manufacturing, and/or warning about the self-driving car, parties to the litigation should feel some level of comfort with the familiar analysis of the “reasonable prudent standard” that exists in normal motor vehicles accidents involving individuals driving the vehicles.  See Yost v. Fuscaldo, 185 W. Va. 493, 497-98, 408 S.E.2d 72, 76-77 (1991).

 It appears that the days of a driver being simply negligent in causing a motor vehicle accident are coming to a close, or at the very least on the decline, with news of the self-driving cars on the way.  Causes of action for negligence may still be asserted against the individual behind the wheel, but it is expected that the main focus of the litigation will be centered on the liability of the manufacturer of the self-driving car.  With the recent tort reform that has been occurring in the West Virginia State Legislature, expect the legislature to tackle the issue to reduce exposure of liability for manufacturers in future sessions, and look for the Supreme Court of Appeals of West Virginia to promptly deal with this issue at the first chance it is given to review a case involving a self-driving car, which appears to be much sooner rather than later.

Virginia Supreme Court Addresses Elements Necessary for a Spoliation of Evidence Inference at Trial

/in /by Virginia Supreme Court Addresses Elements Necessary for a Spoliation of Evidence Inference at Trial

In a case of first impression decided December 28, 2017, the Virginia Supreme Court clarified the requirements for a spoliation of evidence jury instruction where there is no “bad faith” associated with the loss of evidence.  In doing so, the court reversed a verdict for the plaintiff and remanded the case for a new trial.

Spoliation of evidence occurs when a party is aware that litigation is pending or probable involving evidence in the party’s possession or control, and the destruction or failure to preserve the evidence will adversely affect the opposing party’s ability to prove its claims at trial.  If the court finds spoliation of evidence has occurred, it may take various remedial measures depending on the severity of the situation.

In Emerald Point, LLC et al. v. Lindsey Hawkins, et al., the plaintiff tenants alleged that they suffered carbon monoxide exposure as a result of the defendant landlord’s failure to properly maintain the furnace, vents, and flues, resulting in serious bodily injuries.  They filed suit in Virginia Beach Circuit Court for negligence in 2014.

The old furnace that was in place when the carbon monoxide was first discovered was removed from the plaintiffs’ apartment and stored for more than one year.  It was later disposed of before the plaintiffs’ filed suit.  The court agreed to give an instruction to the jury on spoliation of evidence that, “if a party has exclusive possession of evidence which a party knows, or reasonably should have known would be material to a potential civil action and the party disposes of that evidence,” then the jury may infer that the evidence would be detrimental to the case of the party that disposed of it.

 The jury found in favor of the plaintiffs.  The defendant appealed the decision on several grounds, including an objection to the instruction on spoliation of evidence that was given to the jury at trial.  The defendant argued that such an instruction was not warranted, as it was not reasonably on notice of the litigation at the time the furnace was disposed of.  Second, the defendant questioned whether any relief for spoliation of evidence was appropriate without an express finding that it had acted in bad faith in disposing of the furnace.

The Virginia Supreme Court held that “evidence must support a finding of intentional loss or destruction of evidence in order to prevent its use in litigation before the court may permit the spoliation inference.”  Negligent destruction of evidence is not sufficient to warrant an inference of spoliation of evidence.  Therefore, the trial court erred in giving a spoliation of evidence jury instruction without an express finding that the furnace was intentionally discarded.

This decision is a welcome one, as it raises the bar for a spoliation of evidence inference at trial and avoids penalizing a party that may negligently, but without bad faith, discard or destroy evidence when there is a possibility of litigation.

2018 Legal Technology Trends

The start of a new year brings with it reflections as well as predictions.  Here’s a brief look at some of the technology trends expect to impact the legal world and improve outcomes for clients.

  1. Big data and e-discovery: The use of computer technology in the discovery process continues to evolve. It’s expected that in 2018 big data algorithms will become more mainstream, allowing a wide range of businesses, including law firms, to run more efficiently. Specifically, algorithms with predictive analytics can be used to reduce the costs of document review in e-discovery.
  1. Blockchain: The technology behind Bitcoin is expected to find application in other industries as well. Because Blockchain is impossible to hack or forge, it is used to track financial assets.  It is also being used in the so-called “smart contracts” – electronic contracts that utilize the technology to verify and store a user’s signature rather than physically signing a paper contract or clicking various confirmation buttons on an electronic contract.  The technology is expected to be of great use in the financial, healthcare, and insurance industries.
  1. Internet of Things: Experts estimate that approximately 8 billion “things” worldwide are now Internet connected, from cell phones and smartwatches to refrigerators and wireless printers.  Electronic personal assistants such as Amazon Echo and Google Home are also becoming more mainstream.  It is possible that data from an appliance or wearable electronic device will become a prevalent source of evidence in litigation.

Winter Slip and Falls Accumulate in the Spring

/in /by Winter Slip and Falls Accumulate in the Spring

Although winter seems like a distant memory for most, claims arising out of slips and falls related to snow and ice claims still seem to accumulate.  Whenever it snows, commercial property owners are faced with the burden of removing snow and ice hazards from their premises or facing legal action should a pedestrian slip and fall and injure himself/herself.  Specifically, a landowner has an affirmative duty to keep premises reasonably safe by removing accumulations of snow and ice.  Commercial landowners continue to be sued despite their efforts to do so; however, the Delaware Superior Court has for the first time recognized the expertise required in carrying out these efforts.

 On December 12, 2017, Delaware Superior Court Judge John A. Parkins issued a decision that could potentially curb some of the more futile snow and ice removal litigation.  Judge Parkins opined that a plaintiff must proffer expert testimony when disputing the reasonableness of ice remediation efforts. Prior to this decision, the question of whether snow and ice remediation was left to a layman jury which often resulted in early settlements to avoid the risk of trial.

Specifically, in Ridgway v. Acme Markets et al, C.A. N16A-01-183 JAP (Del. Super. Dec. 2017) , a Plaintiff sued after she slipped and fell on ice in the parking lot alleging that ACME Markets, its landlord, and the snow removal contractor were negligent in their efforts to remove snow and ice from their premises.   However, the unrebutted evidence revealed that in the days prior to the Plaintiff’s slip and fall, the parking lot was plowed, the walkways were shoveled twice, salt was applied to the parking lot five times and calcium chloride was applied to the sidewalks twice.   The Defendants moved for summary judgment arguing, among other things, that expert testimony was required to show that the efforts to keep the parking lot clear were unreasonable.

At oral argument, Franklin & Prokopik’s Eric S. Thompson successfully argued that the methodology of removing snow and spreading salt on a commercial property is beyond the purview of a lay person and requires scientific, technical, or specialized knowledge.  He further argued, that the performance of ice remediation on a commercial property should not be discounted to a trivial exercise and is one which requires knowledge of the property, the impact of weather and temperature on the substance being applied, and how best to apply the ice remediation substance.

        Judge Parkins in granting summary judgment agreed and held that:

The accumulation of snow and ice is a natural occurrence.  The mere presence of ice in a parking lot does not, without more, establish negligence.  Even using every available measure to make the premises safe, a defendant cannot be expected to remove every single snowflake or patch of ice from the premises.  In order to understand what is needed and is reasonable under the circumstances to meet an industry standard, expert testimony is required.

 In a case of first impression in Delaware, Judge Parkins granted Defendants’ Motion for Summary Judgment for Plaintiff’s failure to retain a liability expert.

 If you have additional questions on Delaware premises liability or commercial landowner’s obligations for snow and ice removal, please contact our Delaware office at 302.594.9780.

West Virginia Supreme Court of Appeals Limits the Scope of the Consumer Credit Protection Act

/in /by West Virginia Supreme Court of Appeals Limits the Scope of the Consumer Credit Protection Act

As many of you know, the West Virginia Consumer Credit Protection Act (“WVCCPA” or “Act”) is a remedial statute designed to protect West Virginia citizens from oppressive, unreasonable, and abusive conduct from debt collectors.  In recent years, the downturn in the economy has led to an increase in WVCCPA litigation, especially cases involving out of state lenders/creditors.  In Young v. EOSCCA (January 2017 Term No. 16-0151), the West Virginia Supreme Court of Appeals was faced with the issue of who constitutes a consumer under the WVCCPA in an appeal from the Circuit Court’s granting of summary judgment in favor of the creditor, EOSCCA.  Specifically, Ms. Young alleged that she received numerous phone calls at her home from EOSCCA; however, Ms. Young did not have any specific debt in connection with the calls that EOSCCA made to her home phone. Rather, the calls EOSCCA made to Ms. Young were in an attempt to locate a customer who was delinquent on his account.

On appeal, Ms. Young contends that she should be permitted to pursue a cause of action under the Act against EOSCCA despite the fact that the communications were not related to a debt she personally owed.  Thus, Ms. Young argued that she is a “consumer” in a generic fashion based on debts she owes to creditors other than EOSCCA’s client, and as such, the Act allows a claim when abusive debt collection practices are being made in connection with the debt owed by a third party.

In its analysis, the Court stated the two statutory definitions of consumer in the Act are “a natural person who incurs debt pursuant to a consumer credit sale or a consumer loan, or debt or other obligations pursuant to a consumer lease,” and “any natural person obligated or allegedly obligated to pay any debt.”  The Court stated that Ms. Young could not hold herself out as an “alleged debtor” based on repetitive calls to her home, as no evidence was submitted that EOSCCA ever identified Ms. Young as a debtor or sought to communicate that she personally owed money, and as such, she was unable to show that she was obligated to pay.  In turn, the Court disagreed with Ms. Young’s position that she is a “generic” consumer based on the fact that she owes money to other creditors by holding that the Legislature designed the Act in terms of connecting the prohibited debt collection practices to the specific debt at issue.

Finally, the Court held that under the Act, the term “consumer” has a specific definition and only those persons meeting that definition may bring a private cause of action, and that by limiting the right to recover for a violation of the Act to those persons defined as “consumers,” the Legislature has expressly prohibited any persons falling outside the definition of “consumer” from seeking damages and statutory penalties pursuant to the provisions of the Act.

In closing, although the holding of the Court in this matter may not seem significant, it is a positive case for creditors in the state of West Virginia, who must always be cognizant of the very long reach of the Act and its severe penalties and fee shifting results.

For more information about this article, please contact Greg Kennedy at 304.596.2277or gkennedy@fandpnet.com

 

Discovery Deadlines and the Importance of Court Approval

/in /by Discovery Deadlines and the Importance of Court Approval

The Delaware Supreme Court has long valued the civility fostered within the Delaware Bar, and has encouraged Delaware attorneys to resolve discovery disputes without the need for court involvement.  While these aspects of Delaware practice remain alive and well, the issues facing civil attorneys in granting extensions to trial scheduling orders and the process of doing so, was raised in Christian v. Counseling Resource Associates, Inc.

In Christian, the Delaware Supreme Court determined that the Superior Court erred in precluding the testimony of Plaintiffs’ expert based on Plaintiffs’ failure to provide their expert reports in accordance with the applicable trial scheduling order.  Plaintiffs, the widow and children of the Decedent, brought suit against the Decedent’s health care providers for medical negligence resulting in the Decedent’s suicide.  The trial scheduling order required Plaintiffs’ expert report to be filed by December 3, 2010 in anticipation of an August 1, 2011 trial date.  As the case progressed, Plaintiffs were required to retain new counsel and, in November of 2010, the parties stipulated to extend the relevant expert deadlines.  Although Plaintiffs’ counsel wrote to the court in February of 2011 requesting a teleconference to discuss the discovery schedule, the court refused and informed the parties the trial date would not be altered.

After a number of delays, Plaintiffs’ experts were made available for depositions in late July 2011.  Shortly thereafter, Defendants filed a motion to preclude Plaintiffs’ expert testimony.  The trial court granted that motion and a related motion for summary judgment, which effectively barred Plaintiffs’ claims as a matter of law in light of the lack of expert testimony. On appeal, the Delaware Supreme Court found the trial court abused its discretion in refusing to hold a scheduling conference and in ultimately precluding Plaintiffs’ expert testimony.

In so holding, the Supreme Court reviewed six (6) factors that must be considered by the trial court in determining whether a case should be dismissed for the attorneys’ failure to abide by scheduling orders.  These factors include:

(1) the extent of the party’s personal responsibility; (2) the prejudice to the dversary caused by the failure to meet scheduling orders and respond to discovery; (3) a history of dilatoriness; (4) whether the conduct of the party or the attorney was willful or in bad faith; (5) the effectiveness of sanctions other than dismissal…; and (6) the meritoriousness of the claim or defense.

Although a review of the factors suggested dismissal was warranted, the Supreme Court reviewed the case in light of the trial court’s failure to hold a scheduling conference when requested by Plaintiffs’ counsel, and at a time where dismissal could have been avoided.

In reviewing the case before it, the Delaware Supreme Court advised litigants that “if they act without court approval, they do so at their own risk.”  The Court further iterated that, “[i]f one party misses a discovery deadline, opposing counsel will have two choices – resolve the matter informally or promptly notify the court.”  Should a party choose not to involve the court, that party will be deemed to have waived the right to contest any late filings by opposing counsel from that time forward.  The Court counseled that parties may continue to agree to reasonable extension requests, but a proposed amended scheduling order for the trial court’s signature must be promptly filed.

In the post-Christian landscape, the determination of motions to dismiss based not on the merits, but on discovery violations are less likely to succeed.  Counsel can still agree to extensions of trial scheduling deadlines, but doing so requires the blessing of the court.

For more information about this article, please contact Noelle Torrice at 302.594.9780 or ntorrice@fandpnet.com.