Praetorian Insurance Company v. Virginia Chau, Administratrix of the Estate of Anh Kim Ho And Air Cargo Carriers, LLC ( 2022 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
FILED
September 2022 Term
_____________ November 17, 2022
released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
No. 21-0243 SUPREME COURT OF APPEALS
_____________ OF WEST VIRGINIA
PRAETORIAN INSURANCE COMPANY,
Putative Intervenor Below, Petitioner,
V.
VIRGINIA CHAU,
ADMINISTRATRIX OF THE ESTATE OF
ANH KIM HO,
Plaintiff Below, Respondent,
AND
AIR CARGO CARRIERS, LLC
Defendant Below, Respondent.
________________________________________________
Appeal from the Circuit Court of Kanawha County
The Honorable Louis H. Bloom, Judge
Civil Action No. 19-C-450
AFFIRMED
________________________________________________
AND
_____________
No. 21-0682
_____________
PRAETORIAN INSURANCE COMPANY,
Plaintiff Below, Petitioner,
V.
AIR CARGO CARRIERS, LLC,
AND VIRGINIA CHAU,
ADMINISTRATRIX OF THE ESTATE OF
ANH KIM HO,
Defendants Below, Respondents.
________________________________________________
Appeal from the Circuit Court of Kanawha County
The Honorable Kenneth D. Ballard, Judge
Civil Action No. 20-C-800
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
________________________________________________
Submitted: October 5, 2022
Filed: November 17, 2022
Don C.A. Parker, Esq. William M. Tiano, Esq.
Spilman Thomas & Battle, PLLC Cheryl A. Fisher, Esq.
Charleston, West Virginia Tiano O’Dell PLLC
Attorney for the Petitioner Charleston, West Virginia
Attorney for the Respondent,
Jeffrey M. Wakefield, Esq. Virginia Chau, Administratrix of the
Morgan E. Villers, Esq. Estate of Anh Kim Ho
Flaherty Sensabaugh Bonasso PLLC
Charleston, West Virginia Spencer D. Elliott, Esq.
Attorneys for Amicus Curiae, James C. Stebbins, Esq.
West Virginia Insurance Federation Ramonda C. Marling, Esq.
Lewis Glasser PLLC
Steven K. Wellman Charleston, West Virginia
Sarah A. Walling Attorneys for the Respondent,
Jenkins Fenstermaker, PLLC Air Cargo Carriers, LLC
Huntington, West Virginia
Attorneys for Amicus Curiae,
West Virginia Chamber of Commerce
JUSTICE BUNN delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. “‘West Virginia Rule of Civil Procedure 24(a)(2) allows intervention
of right in an action if an applicant meets four conditions: (1) the application must be
timely; (2) the applicant must claim an interest relating to the property or transaction [that]
is the subject of the action; (3) disposition of the action may, as a practical matter, impair
or impede the applicant’s ability to protect that interest; and (4) the applicant must show
that the interest will not be adequately represented by existing parties.’ Syl. Pt. 2, State ex
rel. Ball v. Cummings, 208 W. Va. 393, 540 S.E.2d 917 (1999).” Syllabus point 4, SWN
Production Co., LLC v. Conley, 243 W. Va. 696, 850 S.E.2d 695 (2020).
2. “‘To justify intervention of right under West Virginia Rule of Civil
Procedure 24(a)(2), the interest claimed by the proposed intervenor must be direct and
substantial. A direct interest is one of such immediate character that the intervenor will
either gain or lose by the direct legal operation and effect of the judgment to be rendered
between the original parties. A substantial interest is one that is capable of definition,
protectable under some law, and specific to the intervenor. In determining the adequacy of
the interest in a motion to intervene of right, courts should also give due regard to the
efficient conduct of the litigation.’ Syl. Pt. 4, State ex rel. Ball v. Cummings, 208 W. Va.
i
393, 540 S.E.2d 917 (1999).” Syllabus point 5, SWN Production Co. v. Conley, 243 W. Va.
696, 850 S.E.2d 695 (2020).
3. “To establish jus tertii standing to vindicate the . . . rights of a third
party, a litigant must (1) have suffered an injury in fact; (2) have a close relation to the third
party; and (3) demonstrate some hindrance to the third party’s ability to protect his or her
own interests.” Syllabus point 5, in part, Kanawha County Public Library Board v. Board
of Education of County of Kanawha, 231 W. Va. 386, 745 S.E.2d 424 (2013).
4. “This Court may, on appeal, affirm the judgment of the lower court
when it appears that such judgment is correct on any legal ground disclosed by the record,
regardless of the ground, reason or theory assigned by the lower court as the basis for its
judgment.” Syllabus point 3, Barnett v. Wolfolk, 149 W. Va. 246, 140 S.E.2d 466 (1965).
ii
Bunn, Justice:
In these consolidated appeals, Praetorian Insurance Company (“Praetorian”)
seeks review of three orders issued by two separate judges presiding over two separate but
related cases in the Circuit Court of Kanawha County. 1 First, Praetorian appeals an order
denying its motion to intervene in a wrongful death action filed against its insured, Air
Cargo Carriers, LLC (“Air Cargo”). Praetorian sought to intervene as a matter of right
under Rule 24(a)(2) of the West Virginia Rules of Civil Procedure solely to assert Air
Cargo’s entitlement to workers’ compensation immunity as to a negligence claim brought
by the plaintiff below, Virginia Chau, as administratrix of the estate of Anh Kim Ho.
Second, Praetorian appeals from two orders entered in its companion declaratory judgment
action. One order denied Praetorian’s motion for summary judgment as to its sought-after
declaration in Count I of its complaint that Air Cargo had no coverage for a deliberate
intent claim asserted by Ms. Chau due to a policy exclusion for conduct engaged in by
deliberate intention as defined by West Virginia Code § 23-4-2(d)(2). The other order
granted motions filed by Ms. Chau and Air Cargo seeking dismissal of Count II of
Praetorian’s declaratory judgment complaint, which sought the same relief Praetorian
pursued in its motion to intervene in Ms. Chau’s wrongful death action, i.e., a declaration
1
We acknowledge and appreciate amicus curiae briefs submitted by the West
Virginia Chamber of Commerce and the West Virginia Insurance Federation in support of
Praetorian’s position in its appeal of the circuit court’s denial of its motion for summary
judgment, Docket No. 21-0682. We considered the arguments presented by these Amici
Curiae in resolving this issue.
1
of Air Cargo’s entitlement to workers’ compensation immunity as to the negligence claim
asserted by Ms. Chau in the companion wrongful death action. For the reasons stated
below, we affirm the circuit court’s order denying Praetorian’s motion to intervene in Ms.
Chau’s wrongful death action for lack of standing to assert Air Cargo’s right to workers’
compensation immunity. In addition, we reverse the circuit court’s order denying
Praetorian’s motion for summary judgment as to Count I of its declaratory judgment
complaint because we find the deliberate intent policy exclusion applies, and Air Cargo
has no coverage. Therefore, we remand on this issue for entry of an order granting summary
judgment to Praetorian. Finally, we affirm the circuit court’s order dismissing Count II of
Praetorian’s declaratory judgement complaint, again concluding that Praetorian lacks
standing to assert Air Cargo’s entitlement to workers’ compensation immunity.
I.
FACTUAL AND PROCEDURAL HISTORY
The litigation underlying these consolidated appeals arose from an aircraft
crash on May 5, 2017, that resulted in the death of Anh Kim Ho. Ms. Ho, an employee of
respondent Air Cargo, served as first officer on the flight. In May 2019, respondent Ms.
Chau, as administratrix of Ms. Ho’s estate, filed a wrongful death action in the Circuit
2
Court of Kanawha County,2 naming Air Cargo as one of the defendants. 3 Ms. Chau asserted
a deliberate intent claim against Air Cargo under West Virginia Code § 23-4-2(d)(2)(B),
and, in the alternative, a negligence claim. 4
Air Cargo is insured under a “Workers Compensation and Employers
Liability Insurance Policy” issued by Praetorian. Praetorian agreed to defend Air Cargo in
the wrongful death action under a reservation of rights and assigned the defense to Edgar
Poe of the law firm Pullin, Fowler, Flanagan, Brown & Poe. 5
In September 2020, Praetorian filed a declaratory judgment action in the
Circuit Court of Kanawha County purportedly seeking to determine its rights and
obligations under the policy issued to Air Cargo. 6 Specifically, Count I of Praetorian’s
2
Judge Louis H. Bloom presides over the wrongful death action. Ms. Chau
later filed an amended complaint, but the claims against Air Cargo remained the same.
3
Other defendants named in the complaint are not parties to these
consolidated appeals and are not relevant to the issues before this Court.
4
Ms. Chau’s complaint states that “[i]f it is determined that [Air Cargo] was
not [Ms. Ho’s] formal employer or was not in good standing and is thus stripped of any
immunities, then Plaintiff asserts an alternative [negligence] claim . . . .”
5
Air Cargo retained separate counsel to represent it as to coverage issues,
including this appeal.
Judge Tod E. Kaufman initially presided over the declaratory judgment
6
action; however, Judge Kaufman retired in March 2021 and the case was reassigned to
Judge Kenneth D. Ballard.
3
complaint sought a declaration that the policy excludes coverage for the deliberate intent
claim asserted in the wrongful death action. However, Count II of Praetorian’s complaint
sought a declaration that Air Cargo is entitled to the workers’ compensation immunity
protections of West Virginia Code § 23-2-6 and, therefore, could not be held liable for
negligence in connection with Ms. Ho’s death. In November 2020, Ms. Chau and Air Cargo
each filed a motion to dismiss Count II of Praetorian’s declaratory judgment complaint.
Both claimed the circuit court had no subject-matter jurisdiction over Count II, as it sought
resolution on the merits of the negligence claim asserted in Ms. Chau’s separate wrongful
death action, and both claimed that Praetorian lacked standing to litigate the merits of Ms.
Chau’s negligence claim.
Also in November 2020, Praetorian filed a motion to transfer the declaratory
judgment action to Judge Bloom, who is presiding over the wrongful death action. All
parties to both the wrongful death and declaratory judgment actions consented to the
motion. In December 2020, while the motion to transfer was pending, Praetorian filed, in
the wrongful death action, a motion to consolidate the declaratory judgment and wrongful
death actions. Praetorian sought consolidation so that Judge Bloom could address a legal
issue common to both actions: “whether Air Cargo is entitled to the workers’ compensation
immunity granted by [West Virginia] Code § 23-2-6.” Ms. Chau opposed the motion to
consolidate and argued that Praetorian sought to “participate directly in litigating the merits
of the Estate’s negligence claim[.]” By order entered on January 13, 2021, Judge Bloom
4
denied both the agreed motion to transfer and the motion to consolidate. No relief from this
order was sought by Praetorian, and no issues related to these rulings are raised in these
consolidated appeals.
Meanwhile, although Ms. Chau’s and Air Cargo’s motions to dismiss Count
II of the declaratory judgment action remained pending, on December 30, 2020, Praetorian
filed a motion for summary judgment in the declaratory judgment action. On February 10,
2021, Praetorian filed a motion in the wrongful death action to intervene as of right under
Rule 24(a)(2) of the West Virginia Rules of Civil Procedure. By order entered on February
25, 2021, Judge Bloom denied Praetorian’s motion to intervene. 7 Praetorian appealed that
order, which was given docket number 21-0243. Thereafter, by two separate orders entered
on July 28, 2021, Judge Ballard dismissed Count II of Praetorian’s declaratory judgment
complaint and denied Praetorian’s motion for summary judgment. Praetorian appealed
these two orders, which were assigned docket number 21-0682. We then consolidated the
two appeals for purposes of our review. First, we address the circuit court’s denial of
Praetorian’s motion to intervene in the wrongful death action. Second, we address the
issues raised on appeal from the declaratory judgment action. More detailed facts are
provided below as necessary.
7
Ms. Chau’s response to Praetorian’s motion to intervene was filed the day
after the circuit court issued its order denying Praetorian’s motion.
5
II.
DOCKET NO. 21-0243 – MOTION TO INTERVENE
The circuit court denied Praetorian’s motion to intervene in the wrongful
death action as a matter of right on two grounds: (1) that Praetorian was not entitled to
intervention of right because it could protect its interests through its declaratory judgment
action; and (2) that the motion was untimely. However, as explained below, we affirm the
circuit court’s decision on a different ground, that Praetorian lacked standing.
A. Standard of Review
On appeal, Praetorian challenges the circuit court’s timeliness decision and
its finding that Praetorian may adequately protect its rights in the companion declaratory
judgment action. In addition, Praetorian claims it has a right to intervene based on its direct
and substantial interest in the issue of Air Cargo’s workers’ compensation immunity. Air
Cargo and Ms. Chau argue that Praetorian lacks standing to intervene on this ground. We
agree and, therefore, decline to address whether the motion was timely or whether
Praetorian may adequately protect its rights in the declaratory judgment action.
Without reaching the issue of timeliness, our review of the circuit court’s
ruling on Praetorian’s motion to intervene under Rule 24(a)(2) is de novo. “The standard
of review of circuit court rulings on the elements governing a timely motion to intervene
as a matter of right under Rule 24(a) of the West Virginia Rules of Civil Procedure is de
6
novo.” Syl. pt. 3, SWN Prod. Co., LLC v. Conley, 243 W. Va. 696, 850 S.E.2d 695 (2020).
Accordingly, we consider anew Praetorian’s motion to intervene as of right under the
circumstances presented in this case.
B. Discussion
Rule 24(a)(2) of the West Virginia Rules of Civil Procedure addresses the
requirements for intervening as a matter of right:
(a) Intervention of Right. – Upon timely application
anyone shall be permitted to intervene in an
action: . . . (2) when the applicant claims an interest relating to
the property or transaction which is the subject of the action
and the applicant is so situated that the disposition of the action
may as a practical matter impair or impede the applicant’s
ability to protect that interest, unless the applicant’s interest is
adequately represented by existing parties.
Under Rule 24(a)(2), an applicant for intervention as of right must meet four prerequisites:
“West Virginia Rule of Civil Procedure 24(a)(2) allows
intervention of right in an action if an applicant meets four
conditions: (1) the application must be timely; (2) the applicant
must claim an interest relating to the property or transaction
[that] is the subject of the action; (3) disposition of the action
may, as a practical matter, impair or impede the applicant’s
ability to protect that interest; and (4) the applicant must show
that the interest will not be adequately represented by existing
parties.” Syl. Pt. 2, State ex rel. Ball v. Cummings, 208 W. Va.
393, 540 S.E.2d 917 (1999).
Syl. pt. 4, SWN Prod. Co., 243 W. Va. 696, 850 S.E.2d 695. A “failure to satisfy any one
of the requirements is fatal to the application” to intervene. Louis J. Palmer, Jr. & Robin
Jean Davis, Litigation Handbook on West Virginia Rules of Civil Procedure, § 24(a)[2], at
7
703 (5th ed. 2017). With respect to the requirement that the applicant “claim an interest
relating to the property or transaction [that] is the subject of the action,” id., we have
explained that
“[t]o justify intervention of right under West Virginia
Rule of Civil Procedure 24(a)(2), the interest claimed by the
proposed intervenor must be direct and substantial. A direct
interest is one of such immediate character that the intervenor
will either gain or lose by the direct legal operation and effect
of the judgment to be rendered between the original parties. A
substantial interest is one that is capable of definition,
protectable under some law, and specific to the intervenor. In
determining the adequacy of the interest in a motion to
intervene of right, courts should also give due regard to the
efficient conduct of the litigation.” Syl. Pt. 4, State ex rel. Ball
v. Cummings, 208 W. Va. 393, 540 S.E.2d 917 (1999).
Syl. pt. 5, SWN Prod. Co., 243 W. Va. 696, 850 S.E.2d 695 (emphasis added). Focusing
on its purported direct and substantial interest in the wrongful death action, Praetorian
argues that, under the policy issued to Air Cargo, it has “the right and duty to
defend . . . any claim, proceeding or suit against [Air Cargo] for damages payable by this
insurance[.]” Praetorian seeks to intervene to “exercise its explicit contractual right under
the Policy to defend Air Cargo against a single aspect of Ms. Chau’s lawsuit – specifically,
Ms. Chau’s claim that Air Cargo does not enjoy workers’ compensation immunity in
connection with Ms. Ho’s death[.]” Thus, although Praetorian is providing Air Cargo’s
defense, under a reservation of rights, and assigned the case to its lawyer of choice,
Praetorian still seeks to intervene in the wrongful death action to assert Air Cargo’s
purported right to immunity. Praetorian reasons that its money, not Air Cargo’s money, is
8
potentially at risk if Ms. Chau’s negligence claim proceeds “despite Air Cargo’s obvious
workers’ compensation immunity.”
Praetorian correctly notes that, while this Court apparently has not spoken
directly on the issue, it is widely recognized that an insurer may intervene in an action
against its insured under Rule 24(a)(2) of the Federal Rules of Civil Procedure. 8 However,
the authority cited by Pretorian concerns intervention by insurance companies to determine
whether they have a duty to defend in the civil action, not to assert the defenses and
immunities held by the insured. 9 Here, rather than asserting an interest “specific to the
8
We have observed that an insurer “had at its disposal . . . the opportunity to
earlier intervene in the proceedings underlying this appeal.” DeVane v. Kennedy, 205
W. Va. 519, 536, 519 S.E.2d 622, 639 (1999) (citing, in part, Rule 24(a) of the West
Virginia Rules of Civil Procedure). We also have acknowledged that the intervention
procedure of Rule 24(a)(2)
enables an indemnitor to have a determination as to whether[,]
under the express indemnity language[,] a defense [of the
indemnitee who has been sued] is required . . . . We deem this
type of intervention to be one of right where an intervenor has
been put on notice by the indemnitee that it should assume the
defense . . . as occurred here.
VanKirk v. Green Constr. Co., 195 W. Va. 714, 724, 466 S.E.2d 782, 792 (1995).
9
See, e.g., Perez v. Potts, No. 2:16-CV-612, 2016 WL 11664974 (S.D. Ohio
Dec. 15, 2016) (concluding that insurer’s interest in litigating the nature of the defendants’
conduct was a sufficient interest to intervene where insureds had no coverage for
knowingly breaching fiduciary duties); Appalachian Power Co. v. Kyle, No. CIV.A. 3:14-
12051, 2015 WL 418145 (S.D.W. Va. Jan. 30, 2015) (allowing insurer to intervene to
resolve coverage issue based on policy exclusion); Doe v. Cnty. of Milwaukee, No. 14-C-
200, 2014 WL 3728078 (E.D. Wis. July 29, 2014) (finding intervention proper to contest
9
intervenor,” 10 Praetorian seeks to intervene to assert Air Cargo’s workers’ compensation
immunity. None of the cases cited by Praetorian allowed an insurer to intervene to assert a
right belonging to its insured.
In fact, it has been recognized that “[a]n applicant seeking to intervene as of
right under Rule 24(a) must possess standing to participate in the lawsuit.” Palmer & Davis,
Litigation Handbook, § 24(a)[2], at 703. “The standing analysis for intervention as of right
generally is treated as equivalent to determining whether the intervenor has a ‘legally
insurance coverage under three policy exclusions); Pulse v. Layne, No. 3:12-CV-70, 2013
WL 142875 (N.D.W. Va. Jan. 11, 2013) (permitting insurer to intervene as a matter of right
to seek declaratory judgment that it had no duty to defend based on exclusions contained
in policy); Zellner v. Herrick, No. 08-C-0315, 2009 WL 188045 (E.D. Wis. Jan. 22, 2009),
aff’d, 639 F.3d 371 (7th Cir. 2011) (granting insurer’s motion to intervene to seek a
declaratory judgment that its insured was not entitled to coverage or a defense for the
claims asserted in lawsuit); Appleton Papers, Inc. v. George A. Whiting Paper Co., No. 08-
C-16, 2009 WL 62988, at *1 (E.D. Wis. Jan. 8, 2009) (allowing insurer to intervene to
challenge the existence of a policy issued to a defendant in the action, and commenting that
insurers claim is not typical in that it “is not based on a coverage dispute over the terms of
the policy-it is founded in its belief that it did not issue NMSC any policy at all.”); Hagen
v. Van’s Lumber & Custom Builders Inc., No. 06-C-122, 2006 WL 3404772 (E.D. Wis.
Nov. 22, 2006) (permitting insurer to intervene to obtain declaratory relief regarding duty
to defend and coverage under policy for damages claimed by plaintiffs); United States v.
Thorson, 219 F.R.D. 623 (W.D. Wis. 2003) (allowing insurer to intervene to seek an order
bifurcating insurance coverage from liability, and to stay a decision on liability until
coverage determined; insurer claimed it had no obligation under terms of policy to defend
insured against claims alleged by plaintiff); Briggs & Stratton Corp. v. Concrete Sales &
Servs., Inc., 166 F.R.D. 43 (M.D. Ga. 1996) (granting insurer’s motion to intervene as a
matter of right to obtain stay of proceedings pending resolution of insurer’s declaratory
judgment action).
Syl. pt. 5, in part, SWN Prod. Co., LLC v. Conley, 243 W. Va. 696, 850
10
S.E.2d 695 (2020).
10
protected’ interest under Rule 24(a). Thus, when a putative intervenor has a legally
protected interest under Rule 24(a), it will also meet constitutional standing requirements,
and vice versa.” Id.In its motion seeking to intervene, Praetorian stated that it sought to intervene
“for the sole, limited purpose of seeking a ruling on the immunity issue,” that is, whether
its insured, Air Cargo, is entitled to workers’ compensation immunity pursuant to West
Virginia Code § 23-2-6. Praetorian further declared that it was “ready, willing, and able to
file a summary judgment motion on the immunity issue immediately,” should the circuit
court grant its motion to intervene. Praetorian went so far as to attach to its motion to
intervene a copy of its proposed summary judgment motion asserting that Air Cargo is
immune from Ms. Chau’s negligence claim.
However, the potential immunity that Praetorian seeks to assert belongs to
Air Cargo, which creates a question as to Praetorian’s standing. “One specific aspect of
standing is that one generally lacks standing to assert the rights of another.” State ex rel.
Leung v. Sanders, 213 W. Va. 569, 578, 584 S.E.2d 203, 212 (2003) (per curiam) (finding
plaintiff in medical malpractice action lacked standing to assert any rights proposed third-
party defendants had under the Medical Professional Liability Act). Thus, we have
explained that
11
[t]raditionally, courts have been reluctant to allow
persons to claim standing to vindicate the rights of a third party
on the grounds that third parties are generally the most
effective advocates of their own rights and that such litigation
will result in an unnecessary adjudication of rights which the
holder either does not wish to assert or will be able to enjoy
regardless of the outcome of the case.
Snyder v. Callaghan, 168 W. Va. 265, 279, 284 S.E.2d 241, 250 (1981). There are,
however, exceptions to this prudential standing rule. 11 We have held that
[t]o establish jus tertii standing to vindicate
the . . . rights of a third party, a litigant must (1) have suffered
an injury in fact; (2) have a close relation to the third party; and
(3) demonstrate some hindrance to the third party’s ability to
protect his or her own interests.
Syl. pt. 5, in part, Kanawha Cnty. Pub. Libr. Bd. v. Bd. of Educ. of Cnty. of Kanawha, 231
W. Va. 386, 745 S.E.2d 424 (2013). 12 In this case, Praetorian does not meet the third factor
11
The prudential standing rule “prohibits a party from litigating the rights of
another.” State ex rel. Abraham Linc. Corp. v. Bedell, 216 W. Va. 99, 112 n.3, 602 S.E.2d
542, 555 n. 3 (2004) (per curiam) (Davis, J., concurring). It “is not constitutionally based.
See American Fed’n of Gov’t Employees, AFL-CIO v. Rumsfeld, 321 F.3d 139, 142 (D.C.
Cir. 2003) (‘Prudential standing, unlike Article III standing, is based not on the
Constitution, but instead on prudent judicial administration.’ (internal quotation marks and
citation omitted)).” Id.12
The holding in Kanawha County Public Library Board is phrased in terms
of vindicating the constitutional rights of a third party. See Syl. pt. 5, Kanawha Cnty. Pub.
Libr. Bd. v. Bd. of Educ. of Cnty. of Kanawha, 231 W. Va. 386, 745 S.E.2d 424 (2013).
However, it has been recognized that “[w]hile successful third-party standing claims have
involved alleged violations of third parties’ constitutional rights,” the United States
Supreme Court has “not stipulated that constitutional claims are a prerequisite.” Pa.
Psychiatric Socy. v. Green Spring Health Servs., Inc., 280 F.3d 278, 291 (3d Cir. 2002).
See also State ex rel. Abraham Linc. Corp., 216 W. Va. at 112, 602 S.E.2d at 555 (Davis,
J., concurring) (discussing jus tertii standing as an exception to the prudential standing rule,
and explaining, at footnote 3, that prudential standing is not constitutionally based).
12
of the test for jus tertii standing in that it has failed to demonstrate any hindrance to Air
Cargo’s ability to assert its own workers’ compensation immunity. Not only is Air Cargo
a party to the wrongful death action, in its answer to Ms. Chau’s complaint, Air Cargo
asserted the defense of workers’ compensation immunity. Moreover, in her response to
Pretorian’s motion to intervene, Ms. Chau pointed out that she has claimed Air Cargo is
not entitled to workers’ compensation immunity due to its alleged failure to comply with
certain mandatory requirements. She averred that this issue is the subject of discovery in
the wrongful death action. Thus, it appears that Air Cargo is pursuing its immunity defense,
albeit not in the manner that Praetorian would prefer. Based on these facts, we find that
Praetorian is not entitled to intervene for the purpose of asserting Air Cargo’s workers’
compensation immunity in the wrongful death action. See, e.g., Forrest v. C.M.A. Mortg.,
Inc., No. 06-C-14, 2007 WL 2903311, at *1 (E.D. Wis. Oct. 3, 2007) (denying, in part,
motion to intervene because insurer, “as an intervening party, does not have standing to
inject its views and arguments into the litigation of the claims between [the parties]”).
Although the circuit court did not rely on standing to deny Praetorian’s
motion, “[t]his Court may, on appeal, affirm the judgment of the lower court when it
appears that such judgment is correct on any legal ground disclosed by the record,
regardless of the ground, reason or theory assigned by the lower court as the basis for its
judgment.” Syl. pt. 3, Barnett v. Wolfolk, 149 W. Va. 246, 140 S.E.2d 466 (1965). Accord
Syl. pt. 2, Milmoe v. Paramount Senior Living at Ona, LLC, ___ W. Va. ___, 875 S.E.2d
13206 (2022). Accordingly, we affirm the circuit court’s denial of Praetorian’s motion to
intervene in the wrongful death action.
III.
DOCKET NO. 21-0682 – DECLARATORY JUDGMENT
Praetorian appeals two orders issued by the circuit court in its declaratory
judgment action, one that granted Ms. Chau’s and Air Cargo’s motions to dismiss Count
II of Praetorian’s declaratory judgment complaint, and one that denied Praetorian’s motion
for summary judgment. Both orders were entered on July 28, 2021. Although Praetorian
sets forth fourteen assignments of error, its analysis addresses only three main alleged
errors: (1) the circuit court erred in finding the subject policy does not exclude coverage
for Ms. Chau’s deliberate intent claim; (2) the circuit court erred in applying the policy’s
domestic workers endorsement; and (3) the circuit court erred by dismissing Count II of
Praetorian’s complaint. After we set out the appropriate standards for our review of these
issues, we will address them in turn.
A. Standard of Review
Praetorian first challenges the circuit court’s order denying its motion for
summary judgment. Typically, the denial of a motion for summary judgment is an
interlocutory ruling not subject to appellate review. However, this Court has explained that
14
where . . . the order denying one party’s motion for summary
judgment simultaneously grants summary judgment to another
party, such an order is final and appealable. In this regard, we
have observed that “[a] motion for summary judgment which
is granted . . . is an appealable final order.” Horace Mann Ins.
Co. v. Leeber, 180 W. Va. 375, 377 n. 5, 376 S.E.2d 581, 583
n. 5 (1988) (citation omitted). This is so because, “an order
qualifies as a final order when it ‘ends the litigation on the
merits and leaves nothing for the court to do but execute the
judgment.’” Durm v. Heck’s, Inc., 184 W. Va. 562, 566, 401
S.E.2d 908, 912 (1991) (quoting Catlin v. United States, 324
U.S. 229, 233, 65 S. Ct. 631, 633, 89 L. Ed. 911, 921 (1945))
(additional citation omitted).
Findley v. State Farm Mut. Auto. Ins. Co., 213 W. Va. 80, 100, 576 S.E.2d 807, 827 (2002).
Here, the circuit court did not deny summary judgment based on the existence of material
questions of fact. Rather, the circuit court found that the policy’s exclusion for intentional
acts did not apply to preclude coverage for Ms. Chau’s deliberate intent claim. By so doing,
the circuit court effectively, though not expressly, granted summary judgment to Ms. Chau
and Air Cargo by resolving the issue of coverage in their favor. Accordingly, the denial of
Praetorian’s motion for summary judgment is appealable, and our review is de novo. “This
Court reviews de novo the denial of a motion for summary judgment, where such a ruling
is properly reviewable by this Court.” Syl. pt. 1, id.Likewise, our review of the circuit court’s order dismissing Count II of
Praetorian’s declaratory judgment complaint is de novo. “Appellate 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, Inc., 194 W. Va. 770, 461 S.E.2d 516 (1995).
15
B. Discussion
Applying the standard of review set forth above, we will address the three
general assignments of error asserted by Praetorian in turn.
1. Policy Exclusion for Deliberate Intent. Praetorian first argues that the
circuit court erred by failing to apply the exclusion for deliberate intent claims found in the
policy issued to Air Cargo. In her amended complaint, Ms. Chau asserted a deliberate intent
claim against Air Cargo under West Virginia Code § 23-4-2(d)(2)(B), alleging, in relevant
part, that Air Cargo violated certain safety statutes, rules, regulations, and standards. West
Virginia Code § 23-4-2(d) provides two ways for an employer to lose the immunity from
suit provided by our workers’ compensation law, one based on intentional acts, as set out
in paragraph (2)(A) below, and the other based upon the violation of safety statutes and
rules, as set out in paragraph (2)(B) below, which is the type of claim asserted by Ms. Chau:
(2) The immunity from suit provided under this section
and under sections six and six-a [§ 23-2-6 and § 23-2-6a],
article two of this chapter may be lost only if the employer or
person against whom liability is asserted acted with “deliberate
intention[.”] This requirement may be satisfied only if:
(A) It is proved that the employer or person
against whom liability is asserted acted with a
consciously, subjectively and deliberately formed
intention to produce the specific result of injury or death
to an employee. This standard requires a showing of an
actual, specific intent and may not be satisfied by
allegation or proof of: (i) Conduct which produces a
result that was not specifically intended; (ii) conduct
which constitutes negligence, no matter how gross or
16
aggravated; or (iii) willful, wanton or reckless
misconduct; or
(B) The trier of fact determines, either through
specific findings of fact made by the court in a trial
without a jury, or through special interrogatories to the
jury in a jury trial, that all of the following facts are
proven:
(i) That a specific unsafe working
condition existed in the workplace which
presented a high degree of risk and a strong
probability of serious injury or death;
(ii) That the employer, prior to the injury,
had actual knowledge of the existence of the
specific unsafe working condition and of the
high degree of risk and the strong probability of
serious injury or death presented by the specific
unsafe working condition.
....
(iii) That the specific unsafe working
condition was a violation of a state or federal
safety statute, rule or regulation, whether cited
or not, or of a commonly accepted and well-
known safety standard within the industry or
business of the employer.
....
(iv) That notwithstanding the existence of
the facts set forth in subparagraphs (i) through
(iii), inclusive, of this paragraph, the person or
persons alleged to have actual knowledge under
subparagraph (ii) nevertheless intentionally
thereafter exposed an employee to the specific
unsafe working condition; and
17
(v) That the employee exposed suffered
serious compensable injury or compensable
death as defined in section one [§ 23-4-1], article
four, chapter twenty-three as a direct and
proximate result of the specific unsafe working
condition. . . .
W. Va. Code § 23-4-2(d)(2) (emphasis added).
The policy Praetorian issued to Air Cargo contains the following exclusion:
This insurance does not cover:
5. bodily injury intentionally caused or aggravated by you or
which is the result of your engaging in conduct equivalent to
an intentional tort, however defined, including by your
deliberate intention as that term is defined by W. Va. Code
§ 23-4-2(d)(2).
The circuit court found this exclusion applied only to intentional torts, and therefore did
not apply to a deliberate intent action founded on the violation of a safety rule or statute.
Accordingly, the court found the policy excluded only deliberate intent actions brought
under West Virginia Code § 23-4-2(d)(2)(A) and did not exclude deliberate intent actions
asserted under West Virginia Code § 23-4-2(d)(2)(B).
Wisconsin law applies to the interpretation of this policy. 13 Under Wisconsin
law, unambiguous policy language is simply applied. “If the words of a contract convey a
13
The parties agree that Wisconsin law applies because the policy was issued
to Air Cargo at its headquarters in Wisconsin. See Syl., Liberty Mut. Ins. Co. v. Triangle
Indus., Inc., 182 W. Va. 580, 390 S.E. 2d 562 (1990) (“In a case involving the interpretation
18
clear and unambiguous meaning, our analysis ends. [Goldstein v. Lindner, 648 N.W.2d
892, 896 (Wis. Ct. App. 2002)].” Marks v. Houston Cas. Co., 866 N.W.2d 393, 401 (Wis.
Ct. App. 2015) (applying this standard to an insurance policy). We find no ambiguity in
the exclusion quoted above. The exclusion plainly states that it does not cover bodily injury
caused or aggravated by an insured’s conduct equivalent to “deliberate intention as that
term is defined by W. Va. Code § 23-4-2(d)(2).” Instead of applying this plain language,
the circuit court limited its application to only West Virginia Code § 23-4-2(d)(2)(A). By
doing so, the circuit court read into the exclusion a limitation that simply is not there. The
policy language refers to the definition of “deliberate intention” found in West Virginia
Code § 23-4-2(d)(2), which includes both subparagraphs (A) and (B). Air Cargo does not
have coverage under this policy for the deliberate intent claim asserted by Ms. Chau under
West Virginia Code § 23-4-2(d)(2)(B) as the policy plainly excludes coverage for such a
claim. Therefore, we find that the circuit court erred in failing to apply the clear and
unambiguous policy language.
Praetorian additionally argues that the circuit court erred in finding the
deliberate intent exclusion violates Wisconsin Statutes §§ 632.23 and 632.25. We agree.
The circuit court found that the intentional act exclusion violated Wisconsin Statutes
of an insurance policy, made in one state to be performed in another, the law of the state
of the formation of the contract shall govern, unless another state has a more significant
relationship to the transaction and the parties, or the law of the other state is contrary to the
public policy of this state.”).
19
§ 632.23, because this provision prohibits excluding or denying coverage based on the
operation of an aircraft in violation of an air regulation. This statute is titled “[p]rohibited
exclusions in aircraft insurance policies,” and states: “[n]o policy covering any liability
arising out of the ownership, maintenance or use of an aircraft, may exclude or deny
coverage because the aircraft is operated in violation of air regulation, whether derived
from federal or state law or local ordinance.” Wis. Stat. § 632.23 (emphasis added).
Under Wisconsin law, “‘[s]tatutory interpretation begins with the language
of the statute.’ State ex rel. Kalal v. Cir. Ct. for Dane Cty., [681 N.W.2d 110, 124 (Wis.
2004)].” State v. Dorsey, 906 N.W.2d 158, 168 (Wis. 2018). “‘[I]f the meaning of the
statute is plain, we ordinarily stop the inquiry.’ Kalal, [681 N.W.2d at 124.]” Dorsey, 906
N.W.2d at 168. The Supreme Court of Wisconsin has further explained that
Context is important to meaning. So, too, is the structure
of the statute in which the operative language appears.
Therefore, statutory language is interpreted in the context in
which it is used; not in isolation but as part of a whole; in
relation to the language of surrounding or closely-related
statutes; and reasonably, to avoid absurd or unreasonable
results.
Kalal, 681 N.W.2d at 124. Furthermore, although “[s]tatutory titles are not part of the
statute. See WIS. STAT. § 990.001(6), . . . [they] ‘may be resorted to in order to resolve a
doubt as to statutory meaning . . . .’ State v. Holcomb, [886 N.W.2d 100, 104 (Wis. Ct.
App. 2016).” In re. E.K., No. 2021AP1377, 2022 WL 4242054, at *10 (Wis. Ct. App. Sept.
15, 2022). While the text of Wisconsin Statutes § 632.23 does not specify the type of
20
insurance to which it applies, reading that language in context, and considering its title, it
is obvious that it applies to aircraft insurance policies. Because the Praetorian policy at
issue is a workers’ compensation and employers liability insurance policy, Wisconsin
Statutes § 632.23 has no application, and the circuit court erred in finding that it precluded
Praetorian from enforcing its deliberate intent exclusion.
The circuit court also found that, under Wisconsin Statutes § 632.25, “in the
event it is determined that Air Cargo failed to comply with rules concerning the safety of
persons, Praetorian shall be responsible to the Estate within the policy insurance limits of
coverage” despite the policy’s deliberate intent exclusion. Wisconsin Statutes § 632.25
provides that
Any condition in an employer’s liability policy
requiring compliance by the insured with rules concerning the
safety of persons shall be limited in its effect in such a way that
in the event of breach by the insured the insurer shall
nevertheless be responsible to the injured person under
s. 632.24 as if the condition has not been breached, but shall be
subrogated to the injured person’s claim against the insured
and be entitled to reimbursement by the latter.
Wis. Stat. § 632.25. This provision applies to “conditions,” not “exclusions.” Under
Wisconsin law, “‘[i]n an insurance policy, an exclusion is a provision which eliminates
coverage where, were it not for the exclusion, coverage would have existed.’ Kan.-Neb.
Nat. Gas Co. v. Hawkeye-Sec. Ins. Co., [240 N.W.2d 28, 32 (Neb. 1976)].” Bortz v.
21
Merrimac Mut. Ins. Co., 286 N.W.2d 16, 19 (Wis. Ct. App. 1979). The Wisconsin Court
of Appeals has further explained that
Section 632.25, Stats., refers to the “breach” of the
“condition.” This is in keeping with the principle that
conditions but not exceptions or exclusions may be breached.
Conditions provide for avoidance of liability if they are
breached. An exception does not provide for a forfeiture, nor
need it do so, since there never was an assumption of risk, there
can be no liability under the policy although the policy remains
in force in respect to the risks assumed. . . .
A condition subsequent is to be distinguished from an
exclusion from the coverage; the breach of the former is to
terminate or suspend the insurance, while the effect of the latter
is to declare that there never was insurance with respect to the
excluded risk. . . .
Bortz, 286 N.W.2d at 20 (citations omitted). Because Wisconsin Statutes § 632.25 applies
to conditions rather than exclusions, the circuit court erred in applying it to the deliberate
intent policy exclusion at issue in this case.
2. The Residence Employees Endorsement (referred to by Praetorian as
the Domestic Workers Endorsement). The workers’ compensation and employer’s
liability insurance policy issued to Air Cargo includes a “Voluntary Compensation and
Employers Liability Coverage for Residence Employees Endorsement” (“residence
employees endorsement” or “endorsement”). The circuit court found that the deliberate
intent exclusion did not apply to the residence employees endorsement; therefore, coverage
existed for deliberate intent claims asserted by residence employees. The endorsement
22
states that certain terms, including “residence employee,” “have the meanings stated in the
policy.” However, the policy does not provide a definition for this term. Absent a definition
for the term “residence employee,” the circuit court found the endorsement ambiguous.
Applying Wisconsin law, under which ambiguities must be resolved in favor of the insured,
the circuit court concluded that Ms. Ho “was arguably a ‘residence employee’ of [Air
Cargo] within the meaning of the policy,” which entitled Air Cargo to coverage for Ms.
Chau’s deliberate intent claim under the residence employees endorsement. To reach this
conclusion, the circuit court reasoned that
Under Wisconsin law, “residence” has been defined
simply as “a person’s house.” State v. Lorentz, 389 Wis. 2d
377, 936 N.W.2d 415 ([Wis. Ct. App.] 2019). However, the
term has also frequently been used to describe the act or fact of
dwelling in a particular locality for some period of time and/or
the status of a legal resident. See, e.g., County of Dane v.
Racine County, 118 Wis. 2d 494, 347 N.W.2d 622 ([Wis. Ct.
App.] 1984) (defining “residence” as “the voluntary
concurrence of physical presence with intent to remain in a
place of fixed habitation”); Golembiewski v. City of
Milwaukee, 231 Wis. 2d 719, 605 N.W.2d 663 ([Wis. Ct. App.]
1999) (defining “residence” as “personal presence at some
place of abode with no present intention of definite and early
removal”); Winnebago County v. [S.A.], 120 Wis. 2d 683, 357
N.W.2d 566 ([Wis. Ct. App.] 1984) [(unpublished table
decision)] (defining “residence” as being physically present in
a “county” with indefinite intent to remain).
Based upon the above, the [c]ourt finds that it is
reasonable to define “residence employee” as an employee of
the insured who resides or has their legal residency in the state
covered by the endorsement (in this case West Virginia). . . .
23
Praetorian argues that the circuit court erred by finding that Ms. Ho was a
residence employee and, as a result, that Air Cargo had coverage for Ms. Chau’s deliberate
intent claim under the residence employee endorsement. We agree. Under Wisconsin law,
if “language that is undefined in the policy is ‘susceptible to more than one reasonable
construction when read in context,’ it is ambiguous.” Acuity v. Bagadia, 750 N.W.2d 817,
823 (Wis. 2008) (emphasis added; citation omitted). Still, Wisconsin courts “interpret
policy language according to its plain and ordinary meaning as understood by a reasonable
person in the position of the insured.” Hirschhorn v. Auto-Owners Ins. Co., 809 N.W.2d
529, 535 (Wis. 2012). Additionally, “ambiguities are construed against the insurer, the
drafter of the policy. . . . However, this does not mean that we must embrace any
grammatically plausible interpretation created by an insured for purposes of litigation.” Id.(citations omitted). Moreover, “[c]ourts are to ‘interpret policy terms not in isolation, but
rather in the context of the policy as a whole.’ Day v. Allstate Indem. Co., [798 N.W.2d
199, 206 (Wis. 2011)].” Connors v. Zurich Am. Ins. Co., 872 N.W.2d 109, 116 (Wis. Ct.
App. 2015).
The circuit court’s analysis of the residence employee endorsement fails to
read the term “residence employee” in context. To place the term “residence employee” in
its proper context, the entire endorsement must be considered. This includes a schedule of
rates for “Residence Employees” that places them in two classes: “Domestic Workers-
Residences-Full-Time” and “Domestic Workers-Residences-Part-Time.” Thus, when read
24
in its proper context, the residence employees endorsement clearly would not be
“understood by a reasonable person in the position of the insured” to include the first officer
of a flight crew, which is the position the decedent, Ms. Ho, held with Air Cargo.
Hirschhorn, 809 N.W.2d at 535. Accordingly, we conclude that Ms. Ho was not a residence
employee, and the circuit court erred in finding that Air Cargo was entitled to coverage for
Ms. Chau’s deliberate intent claim under the residence employees endorsement of the
Praetorian policy.
Given the unambiguous language of the deliberate intent exclusion, and
reading the residence employees endorsement in the proper context, we conclude that the
circuit court erred by failing to grant summary judgment to Praetorian based upon the
deliberate intent exclusion, which precludes coverage for Ms. Chau’s deliberate intent
claim against Air Cargo. Thus, we reverse the circuit court’s summary judgement order,
entered on July 28, 2021, and remand for entry of an order granting summary judgment to
Praetorian on this issue.
3. Dismissal of Count II of Praetorian’s Declaratory Judgment
Complaint. Count II of Praetorian’s declaratory judgment complaint asserted that Air
Cargo was entitled to workers’ compensation immunity from Ms. Chau’s negligence claim
in the wrongful death action under West Virginia Code § 23-2-6. Ms. Chau argued that the
circuit court lacked subject-matter jurisdiction over Count II because resolution of the
25
merits of her negligence claim is the subject of her wrongful death action pending before
another Kanawha County circuit court judge. Ms. Chau additionally claimed that
Praetorian had no standing to litigate the merits of her underlying wrongful death
negligence claim. Air Cargo filed a separate motion to dismiss Count II of Praetorian’s
complaint, but joined the arguments made by Ms. Chau and sought dismissal on those same
grounds. By order entered on July 28, 2021, the circuit court granted the motions and
dismissed Count II of Praetorian’s complaint, concluding that Count II did not meet the
requirements for a justiciable controversy in a declaratory judgment action insofar as the
substantive claims of Count II were pending in another court. The circuit court pointed out
that conflicting resolutions could be reached if both courts addressed the issue. Finally, the
circuit court concluded that “Praetorian has presented no precedent recognizing an
insurer’s contingent indemnity obligation to create adverseness among it, an injured
plaintiff, and its insured to establish standing to litigate the merits of a tort claim.”
Before this Court, Praetorian argues that the circuit court erred by dismissing
Count II of its declaratory judgment complaint. However, as explained above in Section
II.B. of this opinion, we conclude that Praetorian has no standing to assert Air Cargo’s
entitlement to workers’ compensation immunity. For this reason, we find no error and
affirm the circuit court’s order dismissing Count II of Praetorian’s declaratory judgment
complaint.
26
IV.
CONCLUSION
For the reasons explained above, in the appeal docketed as number 21-0243,
we affirm the order of the Circuit Court of Kanawha County, entered on February 25, 2021,
denying Praetorian’s motion to intervene in Ms. Chau’s wrongful death action because
Praetorian lacked standing to intervene for the sole purpose of asserting Air Cargo’s right
to workers’ compensation immunity. In the appeal docketed as number 21-0682, we affirm
in part, reverse in part, and remand. We reverse the order of the Circuit Court of Kanawha
County, entered on July 28, 2021, denying Praetorian’s motion for summary judgment as
to its entitlement to a declaration that the policy issued to Air Cargo excluded coverage for
the deliberate intent claim Ms. Chau has asserted in her wrongful death action. Because we
conclude the exclusion applies, we remand for entry of an order granting summary
judgment to Praetorian on this issue. However, we affirm the circuit court’s order, also
entered on July 28, 2021, dismissing Count II of Praetorian’s declaratory judgment
complaint, which sought to assert Air Cargo’s right to workers’ compensation immunity,
as we find Praetorian lacks standing on this issue.
Docket No. 21-0243, Affirmed.
Docket No. 21-0682, Affirmed in part, Reversed in part, and Remanded.
27