Justia.com Opinion Summary: Petitioner The Galloway Group (Galloway) is a partnership of lawyers with an office in West Virginia. Galloway entered into an agreement with Respondents Fredeking & Fredeking Law Offices, LC (Fredeking) wherein the parties agreed to share attorney fees generated in litigation. Fredeking filed a complaint against Galloway in Wyoming circuit court, alleging that Galloway failed to pay under the agreement. Galloway responded in the Wyoming courts, arguing that Wyoming was not the proper venue for the dispute. After a hearing, the Wyoming court denied Galloway’s motions, and concluded that the dispute could move forward in Wyoming. Galloway sought a writ of prohibition from the West Virginia Supreme Court to prevent the Wyoming court from enforcing its order. Upon review, the West Virginia Supreme Court found that Wyoming was indeed improper venue, and it granted Galloway and writ for prohibition. Consequently, the Wyoming action was dismissed.
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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2011 Term
FILED
May 16, 2011
No. 11-0187
released at 3:00 p.m.
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
STATE OF WEST VIRGINIA EX REL. THE GALLOWAY GROUP,
A WEST VIRGINIA PARTNERSHIP
Petitioner
v.
HONORABLE WARREN R. MCGRAW, JUDGE OF THE
CIRCUIT COURT OF WYOMING COUNTY;
FREDEKING & FREDEKING LAW OFFICES, LC;
AND R.R. FREDEKING, II, INDIVIDUALLY
Respondents
______________________________________________________
Petition for a Writ of Prohibition
WRIT GRANTED AS MOULDED
_____________________________________________________
Submitted: April 26, 2011
Filed: May 16, 2011
Jeffrey M. Wakefield, Esq.
Katie MacCallum Nichols, Esq.
Flaherty Sensabaugh Bonasso
Charleston, West Virginia
Attorneys for The Galloway Group
John D. Wooton, Esq.
The Wooton Law Firm
Beckley, West Virginia
Attorney for Fredeking &
Fredeking Law Offices, LC and
R.R. Fredeking, II, Individually
The Opinion of the Court was delivered PER CURIAM.
SYLLABUS BY THE COURT
1.
“The venue of a cause of action in a case involving breach of contract
in West Virginia arises within the county: (1) in which the contract was made, that is, where
the duty came into existence; or (2) in which the breach or violation of the duty occurs; or
(3) in which the manifestation of the breach - substantial damage occurs.” Syllabus Point 3,
Wetzel Co. Sav. & L. Co. v. Stern Bros., 156 W. Va. 693, 195 S.E.2d 732 (1973).
2.
“Where properly questioned by motion to dismiss under Rule 12(b)(3),
W. Va. R.C.P., venue must be legally demonstrated independent of in personam jurisdiction
of the defendant.” Syllabus Point 1, Wetzel Co. Sav. & L. Co. v. Stern Bros., 156 W. Va.
693, 196 S.E.2d 732 (1973).
Per Curiam:
Petitioner The Galloway Group seeks a writ of prohibition to prevent
Respondent Circuit Court of Wyoming County from enforcing its order denying Petitioner’s
motion to dismiss due to improper venue and Petitioner’s motion to compel arbitration in a
dispute involving the sharing of legal fees. Because this Court finds that venue does not lie
in the Circuit Court of Wyoming County, we grant Petitioner the requested writ as moulded.1
I.
FACTS
Petitioner The Galloway Group (hereinafter “Galloway”) is a partnership of
lawyers with a listed address in Kanawha County, West Virginia. Galloway entered into
agreements with Respondents Fredeking & Fredeking Law Offices, LC and R.R. Fredeking,
II, individually (hereinafter collectively referred to as “Fredeking”) wherein the parties
agreed to share attorney fees generated in certain litigation.
1
The petitioner requested relief on two grounds, i.e., improper venue and enforcement
of the parties’ arbitration agreement. This Court grants relief to the petitioner only as to the
improper venue issue.
1
Fredeking filed a complaint against Galloway in the Circuit Court of Wyoming
County alleging failure to pay monies owed to Fredeking under the parties’ fee-sharing
agreements.2 Galloway subsequently filed several motions in the Circuit Court of Wyoming
County including a motion to compel arbitration and a motion to dismiss due to improper
venue. After a hearing, the circuit court denied Galloway’s motions. With regard to the
denial of the motion to dismiss for improper venue, the circuit court reasoned:
Here, it is undisputed that at least some of the agreements
underlying this action regarded legal representation of certain
persons who were residents of Wyoming County, West Virginia.
This court takes judicial notice that the undertaking led to relief
for those persons and a concomitant debt for legal services owed
unto the parties now before this court. Moreover, such relief
and fees gave rise to a debt owed from these defendants to these
plaintiffs and was [sic] related to and based, at least in part, on
conduct occurring in Wyoming County. Accordingly, this court
finds that venue is proper under W. Va. Code § 56-1-1.
The circuit court also found venue arising from the long-arm statute and concluded that it
could properly exercise in personam jurisdiction over a nonresident defendant, L. Thomas
Galloway, a lawyer from Colorado involved in the fee-sharing agreements. Galloway now
challenges this ruling by the circuit court by means of its petition for a writ of prohibition.
2
Fredeking’s complaint also included claims against other parties who are not
involved in the instant case before this Court.
2
II.
STANDARD OF REVIEW
This Court is asked to review a finding of venue in the action below. In State
ex rel. Riffle v. Ranson, 195 W. Va. 121, 464 S.E.2d 763 (1995), we recognized that
prohibition is appropriate to resolve the issue of whether venue lies in a circuit court. We
explained in Riffle that,
[c]onsidering the inadequacy of the relief permitted by appeal,
we believe this issue should be settled in this original action if
it is to be settled at all. In recent times in every case that has had
a substantial legal issue regarding venue, we have recognized
the importance of resolving the issue in an original action.
Riffle, 195 W. Va. at 124, 464 S.E.2d at 766. In addition, this Court held in Syllabus Point
4 of State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996):
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
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
3
that the third factor, the existence of clear error as a matter of
law, should be given substantial weight.
This standard is our guide in considering the issue before us.
III.
DISCUSSION
The primary issue is whether venue in this case properly lies in the Circuit
Court of Wyoming County.3 This issue is governed by our venue statute, W. Va. Code § 56
1-1(a)(1) (2007), which provides in pertinent part: “Any civil action or other proceeding,
except where it is otherwise specially provided, may hereafter be brought in the circuit court
of any county . . . [w]herein any of the defendants may reside or the cause of action arose[.]”
As noted above, the claims below are based upon agreements between the parties. This
Court has indicated,
The venue of a cause of action in a case involving breach
of contract in West Virginia arises within the county: (1) in
which the contract was made, that is, where the duty came into
existence; or (2) in which the breach or violation of the duty
occurs; or (3) in which the manifestation of the breachsubstantial damage occurs.
3
In light of this Court’s disposition of the issue of venue, we decline to address the
issue of the enforcement of the parties’ arbitration agreement.
4
Syllabus Point 3, Wetzel Co. Sav. & L. Co. v. Stern Bros., 156 W. Va. 693, 195 S.E.2d 732
(1973). With regard to which party has the burden of proof on the issue of venue, this Court
has held that “[w]here properly questioned by motion to dismiss under Rule 12(b)(3), W. Va.
R.C.P., venue must be legally demonstrated independent of in personam jurisdiction of the
defendant.” Syllabus Point 1, Wetzel, supra.
Our venue statute first provides that venue lies in the circuit court of any county
wherein any of the defendants may reside. The circuit court below found that “it is
undisputed that no defendant resides in Wyoming County.” Because venue cannot be
established based on the defendant’s residence in Wyoming County, Fredeking had to
demonstrate that its cause of action arose in Wyoming County. The action below is based
on breach of contract. As a result, in order to demonstrate venue, Fredeking had to show
specifically that the contract between the parties was made in Wyoming County; breach of
the contract occurred in Wyoming County; or that the manifestation of the breach occurred
in Wyoming County. Fredeking has failed to do this. Therefore, Fredeking failed to legally
demonstrate that venue lies in the Circuit Court of Wyoming County.
In its ruling below, the circuit court reasoned that venue properly exists in
Wyoming County by virtue of the fact that the parties generated fees in litigation involving
the UMWA Health & Retirement plan, and that many UMWA members reside in Wyoming
5
County. This reasoning is invalid. First, the provision regarding UMWA litigation appears
in an agreement to which Petitioner Galloway is not a party.4 Second, even if Galloway had
participated in litigation involving the UMWA, our law does not support the conclusion that
this fact would establish venue in Wyoming County for purposes of the legal action below.
The circuit court also found that venue exists in Wyoming County under the
long-arm jurisdiction statute, W. Va. Code § 56-3-33 (2008). This is incorrect. First, the
only defendant in the instant case is Petitioner Galloway, a resident of this State. Counsel
for Fredeking indicated in the hearing below that “we are only proceeding in this Court
against the Partnership Group, the Galloway Group, a West Virginia Partnership.”
Therefore, the long-arm statute is not applicable. Second, as set forth above, venue must be
demonstrated independent of in personam jurisdiction.
Therefore, the circuit court erred
in finding venue under the long-arm statute.
Accordingly, having determined that Galloway does not reside in Wyoming
County and that the cause of action below did not arise in Wyoming County, this Court
concludes that the Circuit Court of Wyoming County clearly erred as a matter of law in
denying Galloway’s motion to dismiss for lack of venue.
4
The circuit court acknowledged in its order that the record is less than clear on
whether UMWA litigation had been completed when The Galloway Group was formed
pursuant to one of the underlying agreements.
6
Because this Court finds that venue does not exist in the Circuit Court of
Wyoming County with regard to the action filed in that court by Respondents Fredeking &
Fredeking Law Offices, LC and R.R. Fredeking, II, individually, against Petitioner The
Galloway Group, we grant as moulded the writ prayed for by Galloway. Consequently,
Fredeking’s action against Galloway in the Circuit Court of Wyoming County is dismissed
without further action or consideration.5
IV.
CONCLUSION
Based on our discussion above, the writ of prohibition prayed for by Petitioner
Galloway is granted as moulded prohibiting the Circuit Court of Wyoming County from
further proceedings in the action of Fredeking & Fredeking Law Offices, LC and R.R.
Fredeking, II, individually, against The Galloway Group.
Writ granted as moulded.
5
After carefully considering Fredeking’s arguments set forth in their briefs and in oral
argument, this Court rejects Fredeking’s contention that Galloway waived the issue of venue.
To the contrary, Galloway challenged venue in its Rule 12(b)(6) motion to dismiss and in the
hearing before the circuit court. We further reject Fredeking’s position that this Court should
dismiss the petition for a writ of prohibition as defective. Fredeking cites no law to support
their position. Furthermore, this Court finds such a position to be meritless.
7
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