Opinion
Civil Action No. 5:01CV59 (STAMP)
July 15, 2002
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS' MOTION TO RECONSIDER AND CERTIFY QUESTION OF LAW TO THE WEST VIRGINIA SUPREME COURT OF APPEALS
On March 21, 2002, defendants, Robert and Helen Stillwell, filed a motion to reconsider and certify a question of law to the West Virginia Supreme Court of Appeals. Plaintiff, American Reliable Insurance Company, filed a brief in response to defendants' motion to reconsider on April 3, 2002, and defendants filed a reply memorandum on April 4, 2002.
This Court will treat defendants' motion to reconsider as a motion to alter or amend under Federal Rule of Civil Procedure 59(e). The Fourth Circuit has recognized three grounds for amending an earlier judgment: (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice. See Pacific Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998). "Rule 59 (e) motions raised prior to the issuance of the judgment, nor may they be used to argue a case under a novel legal theory that the party had the ability to address in the first instance." Id. A Rule 59(e) motion may not be used to relitigate old matters and is an extraordinary remedy that should be used sparingly. See id. It is improper to use such a motion "to ask the court to rethink what the court has already thought through — rightly or wrongly." Above the Belt, Inc. v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 1010 (E.D. Va. 1983).
On March 18, 2002, this Court entered an order granting defendants' motion to dismiss and denying plaintiffs' motion to compel arbitration. This Court based its ruling on lack of subject matter jurisdiction and alternatively waiver and abstention. This Court also denied defendants' motion for an award of attorney's fees and expenses of litigation because the Court did not believe that statutory or common law permitted the Court to award attorney' s fees pursuant to Federal Rule of Civil Procedure 54(d).
The defendants now ask this Court to reconsider their motion for an award of attorney's fees and expenses and that reconsideration of the motion be stayed pending an answer to a question of law that defendants request this Court to certify to the West Virginia Supreme Court of Appeals.
West Virginia has enacted the Uniform Certification of Questions of Law Act, W. Va. Code § 51-1A-1 et al. West Virginia Code § 51-1A-3 provides:
The Supreme Court of Appeals of West Virginia may answer a question of law certified to it by any court of the United States . . . if the answer may be determinative of an issue in a pending cause in the certifying court and if there is no controlling appellate decision, constitutional provision, or statute of this state.
W. Va. Code § 51-1A-3. The West Virginia Supreme Court of Appeals has recognized that the provisions of the Uniform Certification of Questions of Law Act are not mandatory. See Morningstar v. Black Decker Mfcr. Co., 253 S.E.2d 666, 668 (W.Va. 1979). Thus, certification is discretionary both for the certifying court and for the court requested to answer the certified question. The Supreme Court of Appeals has stated that "[i]t is rather apparent that where our State's substantive law is clear, there is no need to obtain certification under West Virginia Code, 51-1A-1, et seq." See id. at 669.
Defendants propose the following question for certification:
Under West Virginia law, when an insurer initiates litigation against his policyholder to compel arbitration, does the policyholder have the right to recover attorney's fees and expenses of litigation from the insurer when the policyholder prevails in such litigation?
The defendants argue that the Supreme Court of Appeals has consistently mandated payment of fees and expenses to policyholders who have prevailed in litigation against their insurers so that the policyholders will not have to suffer the hardship of attorney's fees and expenses incurred as a result of litigation with their insurer. These cases include Hayseeds, Inc. v. State Farm Fire Cas., 352 S.E.2d 73 (W.Va. 1986), and Aetna Cas. Surety v. Pitrolo, 342 S.E.2d 156 (W.Va. 1986). In Hayseeds, the court recognized that the American rule is that "both sides of a civil controversy must pay their own attorney's fees — win, lose or draw." Hayseeds, Inc., 352 S.E.2d at 78 (citing Alyeska Pipeline Service, Co. v. Wilderness Soc'y, 421 U.S. 240 (1975)). The Court went on to say that "in the absence of a statutory or contractual provision providing for such recovery, attorney's fees may not be recovered in an action on an insurance policy." Id. However, the court carved out an exception and held that "whenever a policyholder must sue his own insurance company over any property damage claim, and the policyholder substantially prevails in the action, the company is liable for the payment of the policyholder's reasonable attorney's fees." See id. at 80. Pitrolo also carved out an exception to the American rule and held that "[w]here a declaratory judgment action is filed to determine whether an insurer has a duty to defend its insured under its policy, if the insurer is found to have such a duty, its insured is entitled to recover reasonable attorney's fees arising from the declaratory judgment litigation." Pitrolo, 342 S.E.2d at 157, syl. pt. 2.
Defendants are not seeking a clarification of an ambiguity or attempting to fill a void in West Virginia law. Defendants are instead seeking to expand the Supreme Court of Appeal's exceptions to the American rule. This Court finds that West Virginia law is quite clear: The American rule that both sides of a civil controversy must pay their own attorney's fees remains the law in the absence of a statutory or contractual provision providing for recovery of attorney's fees or case law that carves out an exception. Because there is no statutory or contractual provision or case law that carves out an exception, the American rule must apply.
Further, there is no provision in the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1-16, that awards attorney's fees to a party who is successful in pursuing a motion to compel arbitration or in defeating a motion to compel arbitration. The FAA was enacted to rigorously enforce private written arbitration agreements. See Mitsubishi Motors Corp. v. Soler Chrvsler-Plymouth, Inc., 473 U.S. 614, 625-26 (1985). "The `liberal federal policy favoring arbitration agreements,' . . . manifested by this provision and the Act as a whole, is at bottom a policy guaranteeing the enforcement of private contractual agreements: the Act simply `creates a body of federal substantive law establishing and regulating the duty to honor an agreement to arbitrate.'" Id. at 625 (citations omitted). "Motions to compel arbitration under an arbitration clause should not be denied `unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.'" Zandford v. Prudential-Bache Sec., Inc., 112 F.3d 723, 727 (4th Cir. 1997) (citations omitted). Thus, awarding attorney's fees to a party who defeats a motion to compel arbitration under the FAA would frustrate Congress' intention to "rigorously enforce" arbitration agreements.
Defendants' motion to reconsider is DENIED because they have not presented this Court with any newly discovered evidence and have not revealed any manifest errors of law. Further, defendants' request to certify their attorney's fees question to the West Virginia Supreme Court of Appeals is DENIED because West Virginia substantive law is clear and there is no need to obtain certification.
IT IS SO ORDERED.
The Clerk is directed to transmit copies of this order to counsel of record herein.