Evanston Insurance v. Powell Construction

STATE OF WEST VIRGINIA

SUPREME COURT OF APPEALS

Evanston Insurance Company, FILED March 29, 2013 Plaintiff Below, Petitioner RORY L. PERRY II, CLERK SUPREME COURT OF APPEALS OF WEST VIRGINIA vs) No. 12-0208 (Logan County 11-C-49)

Powell Construction Co., Inc. Defendant Below, Respondent

MEMORANDUM DECISION Petitioner Evanston Insurance Company (“Evanston”), by counsel Alonzo D. Washington and Lindsey M. Saad, appeals the Circuit Court of Logan County’s order granting respondent’s motion to dismiss entered on January 18, 2012. Respondent Powell Construction Co., Inc. (“Powell”), by counsel Carol P. Smith, has filed its response. Petitioner has filed a reply.

This Court has considered the parties= briefs and the record on appeal. The facts and legal arguments are adequately presented, and the decisional process would not be significantly aided by oral argument. Upon consideration of the standard of review, the briefs, and the record presented, the Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision is appropriate under Rule 21 of the Rules of Appellate Procedure.

Petitioner’s underlying claim is a subrogation claim arising out of the Aracoma Hotel fire. Petitioner alleged that Robert Harris, while employed by respondent and while a guest at Aracoma Hotel, dropped a cigarette in his room during the evening of November 15, 2010, starting the fire. At the time, Harris, a Kentucky resident, was working on a project in Logan, West Virginia, as an employee for respondent and was required to spend the night in Logan.

The owner of Aracoma Hotel, GN Hillside Corporation, had a policy of insurance with Petitioner Evanston, which insured the Aracoma Hotel. Petitioner has paid more than one million dollars for the damages caused by the fire. Petitioner filed this complaint on February 24, 2011, asserting a claim for respondeat superior against respondent. Respondent then moved to dismiss the complaint pursuant to Rule 12(b)(6) of the West Virginia Rules of Civil Procedure. Petitioner filed a response and discovery progressed. On August 31, 2011, petitioner filed an amended complaint asserting claims for relief under the theories of respondeat superior and negligent hiring. Petitioner alleged that Harris had “certain propensities” that made it foreseeable that he posed a threat of injury to others’ person or property based on his prior criminal record and his history as a recovering alcoholic and addict. Respondent then filed a motion to dismiss the amended complaint, petitioner responded, and respondent replied to the response. A hearing was held, and pursuant to the circuit court’s request, both parties submitted proposed orders.

On January 18, 2012, the circuit court entered an order granting respondent’s motion to dismiss. The circuit court found that in order for respondent to be liable for Harris’s actions, Harris had to be an agent of respondent at the time of the tort and the tort had to be committed within the scope of his employment. The court found that Harris was an employee of respondent, but “a construction worker’s act of smoking a cigarette in a hotel room at 7:00 pm on a day when he did not go to work” is not within the scope of his employment. Therefore, the respondeat superior claim was dismissed. As to the negligent hiring claim, the circuit court found that Harris was hired as a construction laborer, which is unrelated to the cause of the fire. Moreover, the circuit court found that Harris’s reported history of alcoholism, addiction, and criminal behavior did not cause the fire, nor does the amended complaint so allege. Finally, the court found that Harris’s background did not make the hotel fire a likely result that respondent should have anticipated.

On appeal, petitioner argues several errors. First, it argues that its stated claims were sufficient to withstand a motion to dismiss and thus the circuit court erred in granting Powell’s motion to dismiss. Petitioner relies on Rule 8 of the West Virginia Rules of Civil Procedure, and notes that this is a notice pleading jurisdiction. Second, it argues that the circuit court erred in finding that it failed to state facts to support its claim of respondeat superior. Petitioner argues that Harris was within the scope of his employment when the fire began because he was required to remain in Logan, West Virginia, as a condition of his employment. Third, petitioner argues that the circuit court erred in finding it failed to state a claim of negligent hiring that would entitle it to relief. Specifically, petitioner argues that in this case, respondent did nothing to investigate Harris’s background to determine his fitness for the job and that if it had, respondent would have known that Harris had the propensity to cause harm to others based on his criminal history and his history as an addict and alcoholic.

Respondent Powell argues in favor of the circuit court’s dismissal, noting that Harris was not acting within the scope of his employment while smoking a cigarette in a hotel room. Respondent also argues that Harris was not at work and was at a place of his own choosing at the time of the fire. Respondent argues that the proper test is whether Harris was fit to work as a construction laborer and whether respondent could foresee Harris dropping a cigarette after work hours which would result in a fire. Respondent further states that Harris’s reported history of alcoholism, addiction, or criminal behavior did not cause the fire, nor did petitioner allege that the fire was caused by any of these things in the complaint.

This Court has previously held that “‘[a]ppellate review of a circuit court’s order granting a motion to dismiss a complaint is de novo.’ Syl. pt. 2, State ex rel. McGraw v. Scott Runyan Pontiac–Buick, 194 W.Va. 770, 461 S.E.2d 516 (1995).” Syl. Pt. 1, Posey v. City of Buckhannon, 228 W.Va. 612, 723 S.E.2d 842 (2012). Our review of the record reflects no error on behalf of the circuit court. Having reviewed the circuit court’s “Order” entered on January 18, 2012, we hereby adopt and incorporate the circuit court’s well-reasoned findings and conclusions as to these three assignments of error raised in this appeal. The Clerk is directed to attach a copy of the circuit court’s order to this memorandum decision.

Finally, petitioner argues that the circuit court erred when it entered an order granting respondent’s motion to dismiss plaintiff’s amended complaint and the order lists facts not included in the amended complaint, which is contrary to the notice pleading standard espoused

under Rule 8 of the West Virginia Rules of Civil Procedure that only requires the plaintiff to assert a short and plain statement of the claim showing the plaintiff is entitled to relief. The only example petitioner gives is the statement that “the Amended Complaint does not allege [respondent] required, directed or requested Mr. Harris to stay at the Aracoma Hotel.” In response, Powell argues that this assignment of error is meritless. Respondent states that the circuit court accepted all of the facts in the complaint as true and used petitioner’s assertions to draw logical conclusions such as the fire did not happen at the worksite since it happened at a hotel, and the fire occurred after working hours since it occurred at 7:00 p.m. This Court agrees. Although Rule 8 requires only a short and plain statement of the claim showing that petitioner is entitled to relief, this Court has stated as follows:

“The trial court, in appraising the sufficiency of a complaint on a Rule 12(b)(6) motion, should not dismiss the complaint unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).” Syllabus Point 3, Chapman v. Kane Transfer Co. Inc., 160 W.Va. 530, 236 S.E.2d 207 (1977). “Dismissal for failure to state a claim is proper ‘where it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.’” Murphy v. Smallridge, 196 W.Va. 35, 37, 468 S.E.2d 167, 168 (1996).

Mey v. Pep Boys-Manny, Moe & Jack, 228 W.Va. 48, 52, 717 S.E.2d 235, 239 (2011). This Court finds no error in the circuit court’s dismissal of this action pursuant to Rule 12(b)(6) of the West Virginia Rules of Civil Procedure.

For the foregoing reasons, we affirm.

Affirmed. ISSUED: March 29, 2013 CONCURRED IN BY:

Chief Justice Brent D. Benjamin Justice Robin Jean Davis Justice Margaret L. Workman Justice Menis E. Ketchum Justice Allen H. Loughry II