Liberty Mutual Insurance v. Patrick Morrisey, Attorney General

760 S.E.2d 863, 236 W. Va. 615, 2014 WL 2695524, 2014 W. Va. LEXIS 698
CourtWest Virginia Supreme Court
DecidedJune 11, 2014
Docket13-0195
StatusPublished
Cited by7 cases

This text of 760 S.E.2d 863 (Liberty Mutual Insurance v. Patrick Morrisey, Attorney General) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liberty Mutual Insurance v. Patrick Morrisey, Attorney General, 760 S.E.2d 863, 236 W. Va. 615, 2014 WL 2695524, 2014 W. Va. LEXIS 698 (W. Va. 2014).

Opinion

PER CURIAM:

The instant action is before the Court upon the appeal of Petitioners, Liberty Mutual Insurance Company (“Liberty Mutual”) and Greg Chandleris Frame & Body, LLC (“Chandler’s”), from a December 13, 2012, order of the Circuit Court of Kanawha County granting the Respondent, Patrick Morri-sey, Attorney General of West Virginia’s motion for summary judgment and motion to dismiss Petitioners’ counterclaim for declaratory judgment. The circuit court also permanently enjoined Liberty Mutual from requiring the use of salvage/recycled OEM crash parts when negotiating repairs for motor vehicles in the year of the vehicle’s manufacture or in the two succeeding years without written consent of the vehicle owner, and permanently enjoined Chandler’s from preparing estimates for the repair of new vehicles using salvage/recycled OEM crash parts unless it provided disclosures and obtained written consent of the vehicle owner. In this appeal, Petitioners allege that the circpit court’s interpretation of.the West Virginia Automotive Crash Paris Act, W. Va.Code § 46A-6B-1, et seq. (1995), (“Crash Paris ’Act”) was erroneous and that the circuit court erred in granting the State’s motions without -conducting further discovery.. Conversely, . the State asserts that the circuit court’s interpretation of the Crash Parts Act was proper and that Petitioners’ admission that it required the use of salvage/recycl'ed OEM parts without written consent was fatal to its Rule 56(f) affidavit. Upon examination of the petition, the response, the submitted appendices, and the arguments of counsel, we conclude that, for reasons set forth more fully below, the circuit court’s order should be'réversed and that this matter be remand-' ed for further proceedings consistent with this Opinion.

I.

FACTUAL AND PROCEDURAL BACKGROUND

. Petitioner Liberty Mutual is an insurance company licensed to do businéss in West Virginia. Liberty Mutual maintains a list' of preferred body shops that may be selected by their insureds to repair vehicles that áre involved in accidents of otherwise damaged. It refers to these preferred body shops as Total Liberty Care (“TLC”) Shops. Petitioner Chandler’s operates an automobile body shop in West Virginia, and is one of Liberty Mutual’s TLC Shops. 1

*619 Liberty Mutual maintains a nationwide policy for its TLC Shops concerning the use of salvage/recycled OEM crash parts. Liberty Mutual asserts that it directed its TLC shops to repair vehicles utilizing salvage/re-eycled OEM crash parts where available and appropriate, which satisfied the following criteria: (a) manufactured by the original manufacturer; '(b) from a vehicle of the same model year or newer; and (c) with the same number of miles or fewer than the vehicle to be repaired. However, Liberty Mutual’s policy that it did not utilize aftermarket crash parts in the repair of vehicles three years old or newer did not change. 2

On December 15, 2011, the Attorney General filed a complaint and petition for temporary and permanent injunction alleging that (1) Petitioner Liberty Mutual required the use of salvage/recycled OEM crash parts when negotiating the repairs for motor vehicles without the written consent of the motor vehicle owner in violation of the West Virginia Crash Parts Act (§ 46A-6B-3) and the West Virginia Consumer Credit and Protection Act (§ 46A-6-104); (2) Petitioner Chandler’s failed to include a written statement notifying motor vehicle owners that salvage/recycled OEM crash parts were being used to repair their vehicles. in violation of West Virginia Code §§ 46A-6B-4 and 46A-6-104; and (3) Petitioners’ failure to disclose to consumers that salvage/recycled OEM crash parts were being used was an unfair or deceptive practice as defined by West Virginia Code § 46A-6-102(7)(M) in violation of West Virginia Code § 46A-6-104. 3

Petitioners removed the action to the United States District Court for the Southern District of West Virginia, asserting that the Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2301, et seq., preempted the West Virginia Automotive Crash Parts Act, W.Va.Code § 46A-6B-1, et seq., because it “prohibit[ed] manufacturers from voiding or invalidating warranties biased on the use. of *620 aftermarket or recycled OEM parts during repairs.” The District Court, Judge Goodwin, issued a Memorandum Opinion and Order on March 27, 2012, remanding the case back to the circuit court, concluding, in part, that (1) the MMWA prohibits warrantors of consumer products from conditioning' warranties on certain circumstances, (2) the West Virginia Crash Parts Act maintains standards for motor vehicle shops and insurance companies- for the repair of newer automobiles, and (3) therefore, the two laws govern different actors and different conduct.

Upon remand, the circuit court held a healing on April 9, 2012,’ on the State’s motion for temporary injunction, at which time the parties agreed that thé matter could be decided on cross motions for summary judgment. Petitioners agreed that they would convert their previously-filed motion to dismiss to a summary judgment motion with the right to supplement said motion. The circuit court permitted the parties the opportunity to conduct discovery, but no scheduling order was entered. On April 25, 2012, the Petitioners each 'filed an answer to the Attorney General’s complaint, including a counterclaim seeking a declaratory judgment concerning the issues at hand. Petitioners also served discovery requests upon the State.

Thereafter, the State filed its motion for summary judgment and attached as exhibits emails between Liberty Mutual and its TLC Shops, work orders from TLC Shops, manufacturer’s position statements from Mazda, Honda, Volvo and Ford, published opinions from -automobile industiy guide Ed-munds.com, and' correspondence from the New York State Auto Collision. Technicians Association and the Federal Trade Commission. The State then filed a motion to dismiss Petitioners’ counterclaim. Petitioners filed their response to the State’s motion for summary judgment and to its motion to dismiss, and included a Rule 56(f) affidavit by its counsel detailing alleged discovery disputes with the State and asserting that further discovery “will reflect that contrary to the representations to [the circuit court], the use of recycled OEM crash parts does not serve to automatically void a manufacturer’s new car warranty_”

The circuit .court held a hearing on September 24, 2012, on the State’s motion for summary judgment and , motion to dismiss Petitioners’ counteixlaim for declaratory judgment. In its December 18, 2012, order, the circuit court stated that it had previously decided this very same issue in a case styled, W.Va. Automotive Dismantlers and Recycler’s Association, the W.Va. Insurance Federation, Inc., and State Farm Mutual Automobile Insurance Company v. McGraw, et al., Civil Action No. 97-C-2797 (Aug.1998). In that case, in an August 20, 1998, order, the circuit court ruled as follows:

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760 S.E.2d 863, 236 W. Va. 615, 2014 WL 2695524, 2014 W. Va. LEXIS 698, Counsel Stack Legal Research, https://law.counselstack.com/opinion/liberty-mutual-insurance-v-patrick-morrisey-attorney-general-wva-2014.