SER Jon Veard v. Hon. Lawrance S. Miller, Jr., Judge , 238 W. Va. 333 ( 2016 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2016 Term
_____________ FILED
October 6, 2016
released at 3:00 p.m.
No. 16-0346 RORY L. PERRY, II CLERK
SUPREME COURT OF APPEALS
_____________ OF WEST VIRGINIA
STATE OF WEST VIRGINIA EX REL.
JON VEARD; VERD-MASONTOWN LIMITED PARTNERSHIP; AND
UNITED PROPERTY MANAGEMENT COMPANY,
Petitioners
V.
HONORABLE LAWRANCE S. MILLER, JR.,
CIRCUIT JUDGE FOR THE EIGHTEENTH JUDICIAL CIRCUIT, AND
ARTHUR J. SUMMERS,
Respondents
____________________________________________________________________
ORIGINAL PROCEEDING IN PROHIBITION
WRIT GRANTED AS MOULDED
____________________________________________________________________
Submitted: September 21, 2016
Filed: October 6, 2016
Richard M. Wallace Jacques R. Williams
J. Todd Bergstrom Brianna W. McCardle
Littler Mendelson Hamstead, Williams & Shook
Morgantown, West Virginia Morgantown, West Virginia
Attorneys for Petitioners Attorneys for Respondents
JUSTICE DAVIS delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. A circuit court has discretion under Rule 42(a), of the West Virginia
Rules of Civil Procedure, to consolidate a magistrate court appeal with an action filed under
the original jurisdiction of the circuit court. However, such consolidation does not permit
the parties to the magistrate court appeal to engage in discovery or have a jury trial in the
consolidated magistrate appeal.
2. The doctrines of collateral estoppel and res judicata apply to a
magistrate court judgment only when it becomes final, either through failure to appeal that
judgment or after exhausting appellate proceedings.
3. When a party appeals a magistrate court judgment to circuit court and
also files a separate civil action in circuit court arising from the same facts in the case
appealed, that new claim should be treated as an amendment to the magistrate court pleading
on a de novo appeal.
4. A circuit court may not allow an amendment for an additional cause of
action, on appeal from a magistrate court judgment, that does not embrace the original
magistrate court pleading. An amendment is allowed only to supply any deficiency or
i
omission in the original pleading, not to inject a new item or cause of action not embraced
by the original pleading.
ii
Davis, Justice:
This is a writ of prohibition proceeding brought under the original jurisdiction
of this Court by Petitioners, defendants below, Jon Veard, Veard-Masontown Limited
Partnership, and United Property Management Company. The Petitioners seek to prohibit
enforcement of an order by the Circuit Court of Preston County which denied their motion
to dismiss three counts of a complaint filed against them by the Respondent, plaintiff below,
Arthur J. Summers.1 In this proceeding, the Petitioners seek to prohibit enforcement of an
order that consolidated the complaint with an appeal of a magistrate court decision brought
by Respondent; dismissal of Counts I and II; and a stay of the litigation of Count IV pending
resolution of the magistrate court appeal. After a careful review of the briefs, the appendix
record, and listening to the argument of the parties, we grant the writ as moulded.
I.
FACTUAL AND PROCEDURAL HISTORY
The limited record in this matter reveals that on August 15, 2015, the
Petitioners, acting under the trade name of Plum Hill Terrace Apartments (“Plum Hill”), filed
a petition in the Magistrate Court of Preston County seeking to have the Respondent evicted
1
The complaint listed a second plaintiff, Rebecca M. White. The complaint set
out a cause of action by Ms. White under Count III. Neither Ms. White nor the claim set out
in Count III is before this Court.
1
from one of their apartments.2 The Respondent filed a pro se answer and asserted a
counterclaim seeking unpaid wages in the amount of $5,000.3 A hearing was held on
October 19, 2015. At that hearing, it was determined that the Respondent had moved from
the apartment and that the Petitioners had recovered possession of the same. Thereafter the
hearing proceeded on the counterclaim for wages brought by Respondent. The magistrate
entered an order on October 19, 2015, dismissing the Petitioners’ complaint as moot, and
rendering a verdict against Respondent on his counterclaim. The Respondent filed an appeal
to circuit court.
On or about December 7, 2015, the Respondent, through counsel, filed a
complaint in circuit court against the Petitioners.4 In the body of the complaint, the
2
In order not to confuse matters, we will for convenience refer to the Petitioners
as the Plum Hill complainant.
3
The Respondent asserted the counterclaim on a form supplied by the
magistrate court for eviction proceedings. The Respondent actually checked the box for a
crossclaim. However, we will treat the matter as a counterclaim because that is the correct
designation. See Mauney v. Imperial Delivery Servs., Inc., 865 F. Supp. 142, 150 n.3
(S.D.N.Y. 1994) (“[c]ross-claims are brought between co-parties.”); Pitcavage v. Mastercraft
Boat Co., 632 F. Supp. 842, 849 (M.D. Pa. 1985) (“Cross-claims are filed against co-parties
and not against adverse parties.”). The Respondent noted in the counterclaim that he was
owed $8,400, but was only seeking the maximum allowed in magistrate court at that time.
It will be noted that in 2016 the Legislature increased the civil jurisdictional amount in
magistrate court to $10,00.00. See W.Va. Code § 50-2-1 (2016) (Repl. Vol. 2016).
4
The caption of the complaint listed as defendants, Jon Veard,
Veard-Masontown Limited Partnership, and United Property Management Company, but not
Plum Hill.
2
Respondent alleged that the Petitioners were “operating a multi-family housing complex in
Masontown . . . , under the name of Plum Hill Terrace Apartments.” In Count I of the
complaint, the Respondent sought damages for unpaid wages in the amount of $6,700 under
the theory of quantum meruit. In Count II, the Respondent sought liquidated damages in the
amount of $20,100 for failure to pay wages timely as required by the West Virginia Wage
Payment and Collection Act.5 Count IV of the complaint sought damages for wrongful
termination under Harless v. First National Bank in Fairmont, 162 W. Va. 116, 246 S.E.2d
270 (1978). On December 9, 2015, the Respondent filed a motion in circuit court seeking
to dismiss the magistrate court appeal without prejudice. In the motion, the Respondent
admitted that the magistrate ruled against him “on the issue of unpaid wages.” The motion
also stated that the Respondent was seeking dismissal without prejudice “in the unlikely
event that it should prove necessary to revive it within the one year provided by statute.”
On December 22, 2015, the circuit court entered an order consolidating the
Respondent’s magistrate court appeal with his circuit court original complaint, “for all
purposes and all events including pre-trial discovery, motions and hearings, and trial.” The
order also stated that the court would allow the Respondent to renew his motion to dismiss
the magistrate court appeal at a later date. The Petitioners filed a motion to dismiss Counts
I, II, and IV of the complaint on January 29, 2016. In that motion, the Petitioners alleged that
5
See W. Va. Code § 21-5-4(e) (2015) (Supp. 2016).
3
the counts should be dismissed because the issues involved were litigated in the magistrate
court proceeding. The Respondent filed a response to the motion to dismiss and argued that
the motion should be denied because (1) the magistrate court proceeding was not final, and
(2) there was no privity in the magistrate court proceeding against Plum Hill and the
Petitioners in the circuit court proceeding. The circuit court entered an order on March 8,
2016, denying the motion to dismiss. The order denying the motion is type written.
However, a handwritten entry was made on the order which states that the court finds “[t]he
parties are not the same in these 2 consolidated cases new and additional parties are in case
# 15-C-190 [the original complaint filed in circuit court].” The Petitioners thereafter filed
a petition for a writ of prohibition with this Court.
II.
STANDARD OF REVIEW
This matter was brought as an original jurisdiction petition for a writ of
prohibition. We held in the single Syllabus point of State ex rel. Vineyard v. O’Brien, 100
W. Va. 163, 130 S.E. 111 (1925), that “[t]he writ of prohibition will issue only in clear cases
where the inferior tribunal is proceeding without, or in excess of, jurisdiction.” See Syl. pt.
1, State ex rel. Progressive Classic Ins. Co. v. Bedell, 224 W. Va. 453, 686 S.E.2d 593
(2009). Guidelines for issuing the writ have been stated as follows:
In determining whether to entertain and issue the writ of
prohibition for cases not involving an absence of jurisdiction but
only where it is claimed that the lower tribunal exceeded its
4
legitimate powers, this Court will examine five factors: (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. These factors are
general guidelines that serve as a useful starting point for
determining whether a discretionary writ of prohibition should
issue. Although all five factors need not be satisfied, it is clear
that the third factor, the existence of clear error as a matter of
law, should be given substantial weight.
Syl. pt. 4, State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996).
Our “review of a circuit court’s order [denying] a motion to dismiss a
complaint is de novo.” State ex rel. Skyline Corp. v. Sweeney, 233 W. Va. 37, 40, 754 S.E.2d
723, 726 (2014) (internal quotations and citation omitted). A motion to dismiss for failure
to state a claim pursuant to Rule 12(b)(6) of the West Virginia Rules of Civil Procedure
should only be granted when “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,
36, 468 S.E.2d 167, 168 (1996) (internal quotations and citation omitted). We also have
recognized that
a court may consider, in addition to the pleadings, documents
annexed to it, and other materials fairly incorporated within it.
This sometimes includes documents referred to in the complaint
5
but not annexed to it. Further, Rule 12(b)(6) permits courts to
consider matters that are susceptible to judicial notice.
Forshey v. Jackson, 222 W. Va. 743, 747, 671 S.E.2d 748, 752 (2008) (quoting Franklin D.
Cleckley, Robin J. Davis, & Louis J. Palmer, Jr., “Litigation Handbook on West Virginia
Rules of Civil Procedure,” § 12(b)(6)[2], at 348 (3d ed. 2008)). With these standards in
mind, we now turn to the merits of this proceeding.
III.
DISCUSSION
A. Consolidation of Magistrate Court Appeal with Circuit Court Action
The first issue raised by the Petitioners is that the circuit court’s consolidation
of Respondent’s magistrate court appeal and his circuit court action was erroneous as a
matter of law.6 The Petitioners also argue that the consolidation order allows the magistrate
court appeal to be subject to full discovery and a jury trial, in contravention of Rule 18 of the
Rules of Civil Procedure for Magistrate Courts and W. Va. Code § 50-5-12 (1994)
(Repl. Vol. 2016). The circuit court’s order stated that it had authority under Rule 42(a) of
the West Virginia Rules of Civil Procedure to consolidate the cases “for all purposes and all
events including pre-trial discovery, motions and hearings, and trial.”7
6
The Petitioners assert that the consolidation order was entered before they
filed an answer to the complaint and made an appearance in the civil action.
7
We note that in his brief and oral argument before this Court, the Respondent
(continued...)
6
As previously noted, the circuit court relied upon Rule 42(a) to consolidate the
cases. Under Rule 42(a), the following is provided:
When actions involving a common question of law or fact are
pending before the court, it may order a joint hearing or trial of
any or all the matters in issue in the actions; it may order all the
actions consolidated; and it may make such orders concerning
proceedings therein as may tend to avoid unnecessary costs or
delay. An action is pending before the court within the meaning
of this subdivision if it is pending before the court on an appeal
from a magistrate.
(Emphasis added). It does not appear that this Court has ever been called upon to determine
the meaning of the last sentence of Rule 42(a).8 The original drafters of our rules of civil
procedure explained this provision as follows:9
This subdivision [Rule 42(a)] is identical with the Federal Rule
except that the last sentence in the subdivision does not appear
in the Federal Rule. This sentence makes it clear that Rule 42(a)
applies to consolidation of actions pending before a court on
appeal from a justice of the peace[.]
7
(...continued)
contends the trial court consolidated the cases under Rule 42(b). The trial court’s order did
not reference Rule 42(b), and it could not have, because that rule addresses transferring and
consolidating actions pending in different courts. The magistrate appeal and the new civil
action were both pending before the same court, but under the court’s appellate and original
jurisdictions respectively.
8
“An interpretation of the West Virginia Rules of Civil Procedure presents a
question of law subject to a de novo review.” Syl. pt. 4, Keesecker v. Bird, 200 W.Va. 667,
490 S.E.2d 754 (1997).
9
It should be noted that the last sentence of the original version of Rule 42(a)
referred to justice of the peace court, which has now been replaced with the magistrate court
system.
7
Marlyn E. Lugar and Lee Silverstein, “West Virginia Rules of Civil Procedure,” Rule 42(a),
pg. 342 (1960) (emphasis added).
At first blush it would appear that the drafters of Rule 42(a) intended to give
circuit courts limited authority to consolidate magistrate court appeals that were pending in
a circuit court. However, in the commentary to Rule 42(b), which addresses transferring and
consolidating actions in different courts, the following is explained:
In those cases in which an appeal is allowed [from a justice of
the peace], the less questionable procedure even under the Rules
would be to appeal from the judgment of a justice of the peace
and thereafter move for consolidation under Rule 42(a), if the
other action is pending in the court to which the appeal is
taken[.]
(Emphasis added). Lugar and Silverstein, “Civil Procedure,” Rule 42(b), pg. 348. It is clear
from the commentary to Rule 42(b), that the drafters of Rule 42(a) intended to give circuit
courts discretion to consolidate a magistrate court appeal with a pending action under the
original jurisdiction of the circuit court. Thus, in the instant case the circuit court could, as
a preliminary matter, consolidate the magistrate court appeal with the pending civil action.
Our determination that Rule 42(a) allows consolidation of a magistrate court
appeal with an action pending under the original jurisdiction of a circuit court does not end
our discussion of this issue. We next must determine what restrictions are imposed on a
8
consolidated magistrate court appeal by Rule 18 of the magistrate court rules and W. Va.
Code § 50-5-12. We begin by addressing Rule 18.
It is provided under Rule 18(d), in part, that “[a]n appeal of a civil action tried
before a magistrate without a jury shall be by trial de novo in circuit court without a jury.”
Rule 18(d) of the magistrate court rules is quite clear in limiting a circuit court’s de novo
jurisdiction over an appeal of a case tried in magistrate court without a jury. See Burr v.
Elmore, No. 13-1078, 2014 WL 5328638, at *2 (W. Va. Oct. 20, 2014) (memorandum
decision) (“[T]he circuit court held a de novo bench trial on respondent’s complaint and
petitioner’s counter-claim.” (emphasis added)). The jurisdiction of the trial court in that
situation does not extend to affording a litigant a jury trial on an appeal. See Robin Davis
and Louis J. Palmer, Jr., “Handbook on the Rules of Civil Procedure for West Virginia
Magistrate Courts,” § 18(d), pg. 258 (2010).
It is further provided under W. Va. Code § 50-5-12(d) that on an appeal of a
magistrate decision “[t]he exhibits, together with all papers and requests filed in the
proceeding, constitute the exclusive record for appeal and shall be made available to the
parties.” See Davis and Palmer, “Handbook,” § 18(d) at 260. This statute is clear in
prohibiting a trial court from allowing discovery in a case appealed from magistrate court.
9
This limitation is consistent with Rule 81(a)(1) of the West Virginia Rules of Civil
Procedure. Rule 81(a)(1) provides, in part:
When the appeal of a case has been granted or perfected, these
rules apply, except that, in a case on appeal from a magistrate
court, Rules 26 through 37 may not be used[.]
(Emphasis added.) See Franklin D. Cleckley, Robin Jean Davis, and Louis J. Palmer, Jr.,
“Litigation Handbook on the West Virginia Rules of Civil Procedure,” § 81(a)(1), pg. 1433
(2012) (“The rule also recognizes that all rules of civil procedure, other than Rule 26 through
Rule 37, apply in an appeal to circuit court.”). It is clear that Rule 81(a)(1) also does not
allow the discovery provisions of Rules 26 through 37 to be used in an appeal from a
magistrate decision. See Cordell v. Jarrett, 171 W. Va. 596, 599, 301 S.E.2d 227, 231
(1982) (“Rule 81(a)(1) . . . recognizes that all rules of civil procedure, other than Rules 26
through 37, apply.”).
In view of the foregoing, we hold that a circuit court has discretion under Rule
42(a), of the West Virginia Rules of Civil Procedure, to consolidate a magistrate court appeal
with an action filed under the original jurisdiction of the circuit court. However, such
consolidation does not permit the parties to the magistrate court appeal to engage in
discovery or have a jury trial in the consolidated magistrate appeal.
10
B. Claims for Unpaid Wages
The Petitioners next argue that Respondent’s claim in the circuit court action
for unpaid wages in Counts I and II are barred as a matter of law because the matter of
unpaid wages was litigated in magistrate court. According to the Petitioners, two prior
decisions of this Court and the application of the doctrines of collateral estoppel10 and res
judicata11 prohibit the Respondent from litigating Counts I and II of his complaint. The
10
The elements of collateral estoppel have been set out by this Court as follows:
Collateral estoppel will bar a claim if four conditions are
met: (1) The issue previously decided is identical to the one
presented in the action in question; (2) there is a final
adjudication on the merits of the prior action; (3) the party
against whom the doctrine is invoked was a party or in privity
with a party to a prior action; and (4) the party against whom the
doctrine is raised had a full and fair opportunity to litigate the
issue in the prior action.
Syl. pt. 1, State v. Miller, 194 W. Va. 3, 459 S.E.2d 114 (1995).
11
The elements of res judicata have been stated as follows:
Before the prosecution of a lawsuit may be barred on the
basis of res judicata, three elements must be satisfied. First,
there must have been a final adjudication on the merits in the
prior action by a court having jurisdiction of the proceedings.
Second, the two actions must involve either the same parties or
persons in privity with those same parties. Third, the cause of
action identified for resolution in the subsequent proceeding
either must be identical to the cause of action determined in the
prior action or must be such that it could have been resolved,
had it been presented, in the prior action.
Syl. pt. 4, Blake v. Charleston Area Med. Ctr., Inc., 201 W. Va. 469, 498 S.E.2d 41 (1997).
11
circuit court found that Counts I and II could be litigated because “[t]he parties are not the
same in these 2 consolidated cases[.]” In his brief, the Respondent also asserts that the
parties to the circuit court action are different and that the claims are different.
We begin by examining the two cases relied upon by the Petitioner. In
Monongahela Power Co. v. Starcher, 174 W. Va. 593, 328 S.E.2d 200 (1985), the plaintiffs,
acting pro se, sued the defendant Monongahela Power Company12 in magistrate court for
destruction of trees and plants on their property. The plaintiffs received a favorable verdict
of $650.00. The plaintiffs thereafter retained counsel and appealed the verdict on the
grounds of inadequacy. However, after the appeal was filed, the circuit court dismissed the
appeal without prejudice, and allowed the plaintiffs to file a new civil action in circuit court
against the defendant.13 Under the new action, the plaintiffs demanded $50,000.00. The
defendant filed a petition for a writ of prohibition with this Court to prevent the circuit court
from allowing the civil action to go forward. The defendant argued that the new circuit court
complaint was barred by the doctrine of res judicata. This Court found that the doctrine of
res judicata did not apply because the magistrate court decision was not final, since it was
still subject to an appeal.14 However, the opinion found that the plaintiffs would not be able
12
The plaintiffs also sued an employee of the defendant.
13
The plaintiffs sued a second defendant, Asplundh Tree Expert Company.
14
The Court made this determination even though the magistrate appeal was
(continued...)
12
to recover an amount above the statutory maximum allowed in magistrate court. The opinion
addressed this disposition as follows:
We are, however, of the view that as to Monongahela, the
plaintiffs are limited upon their complaint in the circuit court to
the $1,500 damage limitation since they are in effect proceeding
on a de novo appeal from the magistrate court.
We affirm our adherence to the general rule that on a de
novo appeal from a magistrate court judgment, the amount
demanded cannot be increased beyond the jurisdictional limit of
the magistrate court. . . . [T]he circuit court upon an appeal
from a [magistrate] can exercise in regard to the controversy
pending before the [magistrate] only such jurisdiction as the
[magistrate] might have exercised. . . .
These legal principles compel the conclusion that the
circuit court acted beyond its jurisdiction in dismissing the
plaintiffs’ de novo appeal and permitting them to file an original
complaint against Monongahela increasing the damages beyond
the $1,500 magistrate jurisdictional level. Our traditional rule
in prohibition is that the writ will lie where the trial court does
not have jurisdiction or having jurisdiction exceeds its legitimate
powers.
Although Monongahela is not entitled to an absolute rule
since the plaintiffs may still pursue their de novo appeal, a
moulded writ is issued preventing the trial on the new complaint
as to Monongahela in the circuit court for an amount in excess
of the $1,500 damage limit.
Monongahela Power, 174 W. Va. at 595, 328 S.E.2d at 202-03 (internal quotations and
citations omitted).
14
(...continued)
dismissed.
13
The second case relied upon by the Petitioners is Truglio v. Julio, 174 W. Va.
66, 322 S.E.2d 698 (1984). This case involved two consolidated appeals from different
counties. For purposes of this discussion, we will present only the facts of the case involving
the plaintiff Maxie Finnegan. The plaintiff in that case acted pro se in suing the defendant
in magistrate court for injuries received when the defendant’s dog bit the plaintiff. A hearing
was held in the matter. After the hearing, but before a decision was made, the plaintiff
consulted a lawyer who advised the plaintiff to dismiss the case and file a new action in
circuit court. The magistrate entered an order awarding a verdict in favor of the plaintiff.
However, the plaintiff filed a voluntary dismissal of the case. The plaintiff thereafter filed
a new action in circuit court. The circuit court dismissed the action, on res judicata
principles, because the case was previously adjudicated in the magistrate court and was not
appealed. The plaintiff appealed the dismissal of the new action. This Court affirmed for the
following reasons:
[O]ne of the primary questions that an appellate court must
address in reviewing magistrate court judgments is whether the
litigants had an opportunity to receive a full hearing on their
claim and whether the magistrate rendered a final judgment.
Where these conditions are fulfilled, the judgment of a
magistrate court is entitled to finality unless overturned on
appeal.
....
Mrs. Finnegan, received a full and fair hearing in the magistrate
court. Ms. Finnegan chose not to consult a lawyer for advice
until after her case was heard and both parties had presented
their evidence. The reason for her request to dismiss her cause
14
of action was that she wished to move to the circuit court where
there is no jurisdictional limit on the amount of recovery. This
court agrees with the appellee . . . that a proper magistrate court
decision bars the subsequent relitigation of a lawsuit in circuit
court. This is not a case in which a litigant attempted to set
aside a magistrate court judgment . . . and get a new trial in the
magistrate court. Nor is Ms. Finnegan appealing the
magistrate’s verdict . . . or amending the ad damnum clause
while her case is pending appeal. The appellant quite simply
requests this court to pretend that a valid, prior judgment of a
magistrate court may be discarded because one litigant became
apprehensive during the proceedings and wished the whole
business could simply vanish. This Court cannot agree.
For the above reasons, the judgment of the Circuit Court
of Cabell County in Case No. 16021 is affirmed[.]
Truglio, 174 W. Va. at 68-70, 322 S.E.2d at 700-02 (citations omitted).
The decisions in Monongahela Power and Truglio teach us, and we so hold,
that the doctrines of collateral estoppel and res judicata apply to a magistrate court judgment
only when it becomes final,15 either through failure to appeal that judgment or after
exhausting appellate proceedings.16 Monongahela Power also instructs us, and we so hold,
15
Although Monongahela Power and Truglio addressed only the issue of res
judicata, the reasoning is the same for the doctrine of collateral estoppel. See Rovello v.
Lewis Cnty. Bd. of Educ., 181 W. Va. 122, 124, 381 S.E.2d 237, 239 (1989) (“For both
collateral estoppel and res judicata there must have been a final judgment rendered disposing
of a case.”).
16
See In re Casey, No. 08-10777, 2008 WL 4552195, at *3 (Bankr. E.D. Tenn.
Oct. 6, 2008) (“[R]es judicata and collateral estoppel apply only if judgment is final;
judgment is not final as long as there is a right to appellate review.” (internal quotations and
citation omitted)); Slavens v. Board of Cnty. Comm’rs for Uinta Cnty., 854 P.2d 683, 685
(continued...)
15
that when a party appeals a magistrate court judgment to circuit court and also files a separate
civil action in circuit court arising from the same facts in the case appealed, that new claim
should be treated as an amendment to the magistrate court pleading on a de novo appeal.
Although the decision in Monongahela Power did not expressly mention the word
amendment, the practical effect of the decision in the case was that the plaintiffs’ new
complaint would be treated as an amendment to pleadings for a de novo appeal of the
magistrate judgment. See W. Va. R. Civ. P. (a)(1) (“[N]o pleadings other than those used in
the case in the magistrate court may be used except by order of the appellate court in the
proceeding after the appeal has been granted or perfected.”). See also Cordell v. Jarrett, 171
W. Va. 596, 599, 301 S.E.2d 227, 231 (1982) (“[O]nce an appeal has been granted, but not
prior thereto, a party may move to amend pleadings[.]”); Grant v. Wyatt, 61 W. Va. 133, 135,
56 S.E. 187, 187 (1906) (“The trial upon an appeal may be upon the pleadings filed. . . , or
upon new or amended pleadings.” (citation omitted). Further, under Monongahela Power,
the new amended pleading is subject to relief that is no greater than that which is allowed in
magistrate court. See Syl. pt. 2, Monongahela Power, 174 W. Va. 593, 328 S.E.2d 200 (“The
general rule is that on a de novo appeal from a magistrate court judgment, the amount
demanded cannot be increased beyond the jurisdictional limit of the magistrate court.”).
Accord Burr v. Elmore, No. 13-1078, 2014 WL 5328638, at *3 (W. Va. Oct. 20, 2014)
16
(...continued)
(Wyo. 1993) (“decision became final with affirmance after appeal to the district court and
no further appeal, the doctrines of res judicata and collateral estoppel applied”).
16
(memorandum decision) (“[T]his Court agrees with the parties that the circuit court erred
when it awarded money damages in excess of its jurisdictional limit for a civil appeal from
magistrate court.”).
The decision in Monongahela Power requires further discussion because it
really addresses an equitable public policy remedy: when a pro se litigant obtains a judgment
in magistrate court that he or she does not like, and thereafter retains an attorney to litigate
the case in a new action in circuit court without the damages limitations of magistrate court.
In Monongahela Power we realized that this double bite at the apple could not be precluded
under the traditional issue and claim preclusion doctrines because the magistrate court
judgment was not final. In order to prevent the manipulation of our judicial system in this
manner, we decided in Monongahela Power that a plaintiff attempting this double bite at the
apple would not be able to obtain relief beyond that which was allowed in magistrate court.
For this reason, the decision in the case treated the new action essentially as nothing more
than amendment to the existing magistrate court pleadings. More importantly, the
amendment in Monongahela Power did not add a new cause of action. See McMahon v.
Charles Schulze, Inc., 483 S.W.2d 666, 668 (Mo. Ct. App. 1972) (“[T]he amendments
permitted are those which merely amplify, clarify, or perfect issues or claims set out in the
original petition.”).
17
In view of our decisions in Monongahela Power and Truglio, the Petitioners’
reliance on the doctrines of collateral estoppel and res judicata is not valid. The record is
clear in showing that the original magistrate court judgment is not final because it is still
pending as an appeal. However, under the decision in Monongahela Power, we believe
Counts I and II are not properly before the circuit court under its original jurisdiction.
The allegations in Count I, seeking unpaid wages under a theory of quantum
meruit, arise out of the magistrate court claim for unpaid wages and, pursuant to the authority
of Monongahela Power, should be treated as an amendment to the magistrate pleadings.17
Further, under the decision in Monongahela Power, the Respondent is precluded from
seeking damages greater than those which were allowed in magistrate court at the time he
filed his original claim in magistrate court.
The allegation in Count II of Respondent’s complaint is not the type of claim
that the decision in Monongahela Power indicated could be treated as an amendment to the
pleadings of a magistrate appeal. In Monongahela Power, the new action by the plaintiffs
in circuit court made “the same allegations and demands for judgment.” Monongahela
Power, 174 W. Va. at 594, 328 S.E.2d at 202. See Gaster v. Belak, 318 A.2d 628, 628 (Del.
17
We interpret Count I as merely setting forth a different theory of recovery,
not a new cause of action.
18
Super. Ct. 1974) (“The right of appeal extends only to a review by retrial of the same cause
of action that was heard and decided below.”). Count II of Respondent’s complaint sets out
an entirely new cause of action for penalty damages under the West Virginia Wage Payment
and Collection Act. This Court has recognized the general rule that “[a]mendments for
additional causes of action may not be allowed on appeal from magistrate court.” Cordell,
171 W. Va. at 600, 301 S.E.2d at 231 (citations omitted). That is, “[a]mendments are
allowed . . . only to supply any deficiency or omission in the original statement, not to inject
a new item or cause of action not embraced or intended to be included in the original account
or statement.” McMahon v. Charles Schulze, Inc., 483 S.W.2d 666, 668 (Mo. Ct. App. 1972)
(internal quotations and citations omitted). See Blue v. Supreme Camp of Am. Woodmen, 135
S.W.2d 373, 375 (Mo. Ct. App. 1940) (“O]n the appeal to the circuit court, no new cause of
action not embraced or intended to be included in the original statement may be added by an
amendment.”). We now make clear, and so hold, a circuit court may not allow an
amendment for an additional cause of action, on appeal from a magistrate court judgment,
that does not embrace the original magistrate court pleading. An amendment is allowed only
to supply any deficiency or omission in the original pleading, not to inject a new item or
cause of action not embraced by the original pleading.
The issue we must decide is whether the new cause of action in Count II could
be said to have been “embraced” by the original claim for unpaid wages. We think it was.
19
A claim for unpaid wages has long carried a statutory penalty. See Mullins v. Venable, 171
W. Va. 92, 94, 297 S.E.2d 866, 869 (1982) (“The West Virginia Wage Payment and
Collection Act is remedial legislation designed to protect working people and assist them in
the collection of compensation wrongly withheld.”). The statute, W. Va. Code § 21-5-4(e),
provides that an employer “is liable to the employee for two times that unpaid amount as
liquidated damages.”18 We believe that, as a general matter, most claims for unpaid wages
should embrace the liquidated damages provision in W. Va. Code § 21-5-4(e). We therefore
believe that Count II of the complaint should be treated as an amendment to the magistrate
pleadings. However, as we have pointed out previously, the Respondent is precluded from
being awarded any damages greater than those which were permitted in magistrate court at
the time he filed his original claim in magistrate court.
The Respondent also argues that the claims in Counts I and II should be treated
as viable independent claims because the parties are different. The Respondent contends that
the defendant he sued in magistrate court, Plum Hill, is not named as a party in his complaint.
We summarily reject this argument. It is true that the caption of the circuit court complaint
names three defendants19 that were not named in the magistrate counterclaim as defendants.
However, the body of the circuit court complaint states that these “Defendants were, at all
18
Prior to a 2015 amendment, the statute allowed treble damages.
19
Namely, the Petitioners herein.
20
relevant times, operating a multi-family housing complex in Masontown . . ., under the name
of Plum Hill Terrace Apartments.” By acknowledging in the body of the complaint that the
Petitioners operated Plum Hill, the Respondent is estopped from now claiming that the
Petitioners are, for litigation purposes, different from the defendant named in the magistrate
court proceeding. In fact, throughout Count I and II of the complaint the Respondent
repeatedly refers to the Petitioners as the “Plum Hill” defendants. For example, in Count I,
paragraph 19 of the complaint the following is set out:
19. When he undertook employment at Plum Hill it was
with the reasonable and mutual expectation that he would be
paid for the value of services he performed on behalf of the
Plum Hill Defendants. . . . Thus, the Plaintiff Summers asserts
that the Plum Hill Defendants owe him $6,700.00 in unpaid
wages pursuant to the doctrine of quantum meruit. To this date,
the Plum Hill Defendants have been unjustly enriched by
profiting from Mr. Summers’ services.20
(Emphasis added).
In sum, Counts I and II are not barred by res judicata and collateral estoppel.
However, those counts may go forward in circuit court only as amendments to the magistrate
court pleadings. Any judgment in favor of the Respondent cannot exceed that which was
allowed in magistrate court at the time of the filing of the original counterclaim.
20
The Respondent has attempted to argue that Plum Hill is a shell company that
could not be sued, and therefore a judgment could not be enforced against it. In this
proceeding, we are not concerned with whether a judgment could be enforced against Plum
Hill.
21
C. Staying the Wrongful Termination Claim
The final issue presented by the Petitioners is a request to require the circuit
court to stay the litigation in Count IV until after the resolution of the magistrate appeal.21
Based upon our analysis of the decision in Monongahela Power, Count IV is not properly
before the circuit court. See River Riders, Inc. v. Steptoe, 223 W. Va. 240, 249 n.14, 672
S.E.2d 376, 385 n.14 (2008) (“Issues of jurisdiction may be raised by this Court sua
sponte.”); Expedited Transp. Sys., Inc. v. Vieweg, 207 W. Va. 90, 96, 529 S.E.2d 110, 116
(2000) (“[B]efore reaching the substantive issues raised, we must first contemplate whether
the circuit court had jurisdiction to consider the appeal of this matter.”).
Count IV of the complaint sets forth a cause of action under Harless v. First
National Bank in Fairmont, 162 W. Va. 116, 246 S.E.2d 270 (1978), for wrongful discharge.
We held in the single Syllabus point of Harless that:
The rule that an employer has an absolute right to
discharge an at will employee must be tempered by the principle
that where the employer’s motivation for the discharge is to
contravene some substantial public policy principle, then the
employer may be liable to the employee for damages occasioned
by this discharge.
21
It should be recalled that the Petitioners originally had filed a motion in
circuit court to dismiss Count IV, along with Counts I and II. The Petitioners have not
explained why they now simply want to stay the litigation of Count IV.
22
Based upon our previous analysis, the Harless claim is a new cause of action. See Wegener
v. Erdman, 154 S.W.2d 969, 970 (Tex. Civ. App. 1941) (“[W]e call attention to the rule that
the plaintiff cannot set up in the county court a different cause of action from that sued upon
in the justice court.”). Consequently, that claim can be brought into the litigation only as an
amendment of the magistrate court pleading, if it is embraced by that pleading. See Personal
Fin. Co. of Wellston v. Schwartz, 170 S.W.2d 701, 704-705 (Mo. Ct. App. 1943) (“[T]he rule
is firmly established that where the proposed amended petition seeks to set up a cause of
action different from the one alleged in the petition which it is to amend or replace, such
proposed amended petition will not be allowed.”).
We believe that the Harless claim is a new cause of action that is not embraced
by the magistrate cause of action for unpaid wages. The facts establishing failure to pay
wages are quite different from those required to show wrongful discharge–the nature of the
evidence is simply not the same.22 This difference is the reason why the Harless claim is not
embraced by the claim for unpaid wages. We therefore conclude that the Harless claim must
be dismissed as a matter of law because the circuit court does not have authority over that
claim in an appeal from the magistrate court proceeding.23 See Hamby Co. v. Palmer, 631
22
For example, in Count IV of the complaint the Respondent alleged that “[t]he
Plum Hill Defendants’ discharge of [him] for questioning [his] employer’s compliance with
the Federal program was in violation of a substantial public policy.”
23
We will note that, under the facts of this case, even if we had taken the
(continued...)
23
S.W.2d 589, 592 (Tex. App. 1982) (“Palmer impermissibly pled a new ground of recovery
not previously advanced in the justice court and the award based on that new pleading cannot
stand.”).
23
(...continued)
position that a claim like the Harless cause of action could go forward as an independent
action under the original jurisdiction of the court, ultimately the Harless claim would be
subject to dismissal under res judicata principles once the magistrate court appeal became
final. That is, assuming the Respondent obtained a favorable judgment on the magistrate
appeal, the Petitioner could then take that final judgment and use it to attack the independent
Harless claim on the grounds of res judicata. See Syl. pt. 1, Johnson v. Rogers, 110 W. Va.
232, 157 S.E. 409 (1931) (“Judgment conclusively determines merits between same parties
as to all matters which were or might have been litigated; judgment is binding as estoppel in
all other actions between same parties whether commenced before or after action resulting
in judgment.”). See also Hoffman v. Nordic Naturals, Inc., No. 15-1362, 2016 WL 4791848
(3d Cir. Sept. 14, 2016) (res judicata applied to second action that was filed several days
before first action became final); Zurich Capital Mkts. Inc. v. Coglianese, 383 F. Supp. 2d
1041, 1049-50 (N.D. Ill. 2005) (“Because res judicata requires a final judgment, the Oceanic
Defendants’ res judicata argument was not ripe at the time they filed their first motion to
dismiss. Accordingly, Rule 12(g) does not bar the Oceanic Defendants from arguing res
judicata in this motion, nor have the Oceanic Defendants waived that argument.” (citation
omitted)). See generally Caperton v. A.T. Massey Coal Co., 223 W. Va. 624, 658-59, 679
S.E.2d 223, 257-58 (2008), rev’d on other grounds and remanded, 556 U.S. 868, 129 S. Ct.
2252, 173 L. Ed. 2d 1208 (2009) (“Although normally the res judicata effect of a prior
judgment must be pleaded and proven at trial, when the judgment becomes final during the
pendency of an appeal in another action, the first final judgment may be brought to the
attention of the appellate court in which the appeal is pending and may there be relied on as
res judicata.”) (internal quotations and citation omitted)). We will point out that one way in
which a magistrate court judgment cannot be used to invoke res judicata is set out under Rule
42(b). A provision in that rule provides that a favorable magistrate judgment to a party of
$15.00 or less cannot be the basis for res judicata under the circumstances outlined by the
rule. See Lugar and Silverstein, “Civil Procedure,” Rule 42(b), pgs. 347-48 (discussing the
origin of this provision).
24
IV.
CONCLUSION
In this proceeding for a writ of prohibition, we have determined the following.
First, the circuit court is prohibited from exercising original jurisdiction over Counts I and
II of the complaint. However, those two counts may go forward in circuit court as
amendments to the magistrate court pleadings, but are subject to the monetary limit of the
magistrate court at the time the original counterclaim was lodged. Second, the circuit court
is prohibited from exercising original jurisdiction over Count IV of the complaint. That count
must be dismissed as a matter of law. This case is remanded to the circuit court for
proceedings consistent with this opinion.
Writ Granted As Moulded.
25