Zaleski v. West Virginia Mutual Insurance

687 S.E.2d 123, 224 W. Va. 544, 2009 W. Va. LEXIS 118
CourtWest Virginia Supreme Court
DecidedNovember 17, 2009
Docket34620
StatusPublished
Cited by21 cases

This text of 687 S.E.2d 123 (Zaleski v. West Virginia Mutual Insurance) 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
Zaleski v. West Virginia Mutual Insurance, 687 S.E.2d 123, 224 W. Va. 544, 2009 W. Va. LEXIS 118 (W. Va. 2009).

Opinions

PER CURIAM:

This case is before the Court for a second time. The underlying matter involves an Ohio County Circuit Court action brought by Dr. Robert J. Zaleski [hereinafter “Dr. Zaleski”], an orthopedic surgeon, following the decision of the West Virginia Mutual Insurance Company [hereinafter “the Mutual”] to [546]*546deny renewal of Dr. Zaleski’s medical malpractice insurance coverage.

In the previous appeal, the Mutual appealed the circuit court’s grant of partial summary judgment to Dr. Zaleski and the denial of the Mutual’s motions seeking dismissal of the ease or for summary judgment. Therein, we considered the issue of whether the circuit court erred in finding that the Mutual is a “state actor” for the purposes of affording its policyholders procedural due process upon review of policy renewal determinations. We affirmed the circuit court’s ruling granting partial summary judgment to Dr. Zaleski and determined that the Mutual is a state actor, and thus, held that physicians who have been afforded the benefit of medical liability insurance coverage through the Mutual are entitled to due process protection in seeking review of any non-renewal decision made by the company. In so holding, we reversed the circuit court’s denial of the Mutual’s dismissal motion and order to reinstate insurance coverage, and remanded the case to the circuit court with directions to (1) remand the question of non-renewal to the Mutual for further hearing in conformity with this Court’s opinion, and (2) conduct such further proceedings not inconsistent with the Court’s opinion as may be required, including the resolution of any disputes which may arise in the course of the Mutual hearing on non-renewal.

The current matter now before the Court involves the Mutual’s appeal of a subsequent order of the circuit court following our decision in Zaleski v. West Virginia Physicians’ Mutual Ins. Co., 220 W.Va. 311, 647 S.E.2d 747 (2007) [hereinafter “Zaleski /”], entered on April 14, 2008, denying the Mutual’s Motion for Reconsideration of its Motion to Dismiss, or in the Alternative Motion for Summary Judgment and also denying the Mutual’s Motion for Entry of Order Granting Motion to Dismiss Pursuant to Rule 12(b)(6), the Mutual’s Motion for Entry of Order Remanding the Non-renewal to the Mutual for Further Hearing and the circuit court’s sua sponte amendment of the Mutual’s non-renewal hearing procedures. Specifically, the parties now dispute whether the circuit court was required, by virtue of our prior mandate in Zaleski I, to grant the Appellant’s motion to dismiss, and whether the circuit court maintained jurisdiction following remand to address the actual content of the Mutual’s due process hearing procedures for non-renewing coverage prior to sending the matter back to the Mutual for hearing. For the reasons stated below, we affirm in part, and reverse in part, the rulings of the circuit court and remand the matter with directions.

I. FACTUAL AND PROCEDURAL BACKGROUND

A brief recitation of the underlying facts follows.1 Dr. Zaleski purchased a professional liability policy from the West Virginia Board of Risk and Insurance Management [hereinafter “BRIM”] providing coverage for claims he made during the period from December 22, 2001 to December 22, 2004. After Dr. Zaleski’s BRIM policy was transferred to the Appellant along with all other BRIM policies2, the Appellant reviewed his prior loss experience and professional training record and determined that Dr. Zaleski represented an unacceptable underwriting risk. On September 8, 2004, the Mutual notified Dr. Zaleski by a certified letter that his existing medical liability insurance policy would not be renewed upon its original termination date of December 22, 2004.3 The notification letter did not state any reasons for the non-renewal. Thereafter, Dr. Zaleski notified the Mutual that he wished to appeal [547]*547the non-renewal decision. In response to Dr. Zaleski’s request, the Mutual designated a hearing date and notified Dr. Zaleski that the hearing would be limited to fifteen minutes in duration.4 Dr. Zaleski attended the appeal hearing on November 11, 2004, and presented evidence to the Committee and responded to questions. The hearing was not stenographieally recorded. The following day, the Mutual called Dr. Zaleski and informed him that the decision to deny renewal was upheld. Dr. Zaleski was also given this same information by way of certified letter dated November 12, 2004. Dr. Zaleski was never advised of any right to appeal the Mutual’s decision.

Following receipt of this information, Dr. Zaleski requested, by letter dated November 30, 2004, a detailed explanation of why the insurance policy would not be renewed. He also filed a formal complaint with the West Virginia Insurance Commissioner. The Mutual responded to the complaint stating that its reason for denying renewal was because of the “frequency of lawsuits in his history.”5 Upon receipt of the Mutual’s response, the Insurance Commissioner determined that no action would be taken against the Mutual, stating that it did not appear that the Mutual had violated any applicable statute or rule regarding non-renewal of the doctor’s policy. The notification did not provide Dr. Zaleski any information regarding his right to seek judicial review of the Insurance Commissioner’s determination through the circuit court.

Following the determination of the Insurance Commissioner, Dr. Zaleski filed the instant action against the Mutual, alleging that the Mutual’s non-renewal of his malpractice insurance policy amounted to breach of the covenant of good faith and fair dealing, arbitrary and capricious conduct, breach of fiduciary duty, intentional infliction of emotional distress and negligent infliction of emotional distress. The Mutual filed a Motion to Dismiss or, In the Alternative, for Summary Judgment which alleged that it did not have a duty to renew Dr. Zaleski’s insurance policy, and even if its decision to deny renewal was done in an arbitrary and capricious manner, “West Virginia law does not recognize an independent cause of action for arbitrary and capricious conduct on behalf of private entities.” Dr. Zaleski filed a cross-motion for summary judgment claiming that the Mutual was a quasi-public agency whose decisions denying renewal of professional liability policies were subject to review under due process standards, and that he was denied proper procedural due process.

On August 5, 2005, the circuit court held a hearing on the Mutual’s motion. Thereafter, on September 22, 2005, the circuit court denied the Mutual’s motion and granted Dr. Zaleski partial summary judgment, finding that the Mutual was a state actor. In that order, Judge Recht found that the procedural due process offered by the Appellant to Dr. Zaleski “at best shallow and at worst a sham.”6 The circuit court directed the Mutual to submit a procedure which would afford due process to policyholders appealing non-renewal decisions. Under protest, but pursuant to the lower court’s direction, the [548]*548Mutual filed a mechanism for review of non-renewal decisions on January 16, 2006. It also included various objections regarding the circuit court’s order.7

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Zaleski v. West Virginia Mutual Insurance
687 S.E.2d 123 (West Virginia Supreme Court, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
687 S.E.2d 123, 224 W. Va. 544, 2009 W. Va. LEXIS 118, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zaleski-v-west-virginia-mutual-insurance-wva-2009.