UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 17-1564
MICHAEL D. MICHAEL, as the Administrator of the Estate of Jack D. Michael;
JUDITH A. KUHN, as the Administratrix for the Estate of Paul F. Henderson et
al.,
Plaintiffs - Appellants,
v.
CONSOLIDATION COAL COMPANY, a Delaware Company,
Defendant - Appellee,
and
ESTATE OF ALEX KOVARBASICH, By and through Albert F. Marano, Sheriff
of Harrison County as administrator for the estates of Alex Kovarbasich,
Defendant.
Appeal from the United States District Court for the Northern District of West Virginia,
at Clarksburg. Irene M. Keeley, Senior District Judge. (1:14-cv-00212-IMK-JES)
Argued: May 9, 2018 Decided: August 15, 2018
Before GREGORY, Chief Judge, and MOTZ and KEENAN, Circuit Judges.
Questions certified to the Supreme Court of Appeals of West Virginia by unpublished
order. Judge Keenan directed entry of the order with the concurrences of Chief Judge
Gregory and Judge Motz.
ARGUED: Scott Sumner Segal, SEGAL LAW FIRM, Charleston, West Virginia, for
Appellants. William Henry Jernigan, DINSMORE & SHOHL LLP, Charleston, West
Virginia, for Appellee. ON BRIEF: Timothy C. Bailey, BAILEY, JAVINS &
CARTER, LC, Charleston, West Virginia; Mark A. Barney, BARNEY LAW PLLC,
Hurricane, West Virginia; Samuel A. Hrko, BAILEY & GLASSER, LLP, Charleston,
West Virginia; C. Paul Estep, Steven L. Shaffer, ESTEP & SHAFFER, LC, Kingwood,
West Virginia, for Appellants. William E. Robinson, Alex M. Greenberg, Christopher
M. Jones, DINSMORE & SHOHL LLP, Charleston, West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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ORDER
BARBARA MILANO KEENAN, Circuit Judge:
The United States Court of Appeals for the Fourth Circuit, exercising the privilege
afforded by the State of West Virginia through the Uniform Certification of Questions of
Law Act, West Virginia Code §§ 51–1A–1 through 51–1A–13, requests that the Supreme
Court of Appeals of West Virginia exercise its discretion to answer the following
questions:
(1) Is a fraudulent concealment claim, as set forth in Kessel v. Leavitt,
511 S.E.2d 720 (W. Va. 1998), cognizable when the alleged injury
was the plaintiffs’ loss of a timely claim for wrongful death under
West Virginia Code §§ 55-7-5, 55-7-6 (1967)?
(2) If the answer to Question (1) is yes: Under the West Virginia
discovery rule, does the statute of limitations for a fraudulent
concealment claim begin to run against a corporate entity when a
plaintiff (A) learns that the entity concealed the intentional act of an
unidentified individual, which resulted in the death of other
employees at the entity’s workplace; or (B) discovers that the entity
concealed both the intentional act and the identity of a particular
employee, who allegedly acted at the direction of the entity,
resulting in the death of other employees at the workplace?
This Court acknowledges that the Supreme Court of Appeals may restate these questions.
See W. Va. Code §§ 51–1A–4, 51–1A–6(a)(3). In our view, there is no controlling
appellate decision, constitutional provision, or statute of West Virginia that answers these
questions. Accordingly, we conclude that the questions are appropriate for certification.
See id. § 51–1A–3.
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I.
The plaintiffs in this class action are the survivors of 78 coal miners killed in an
explosion at the Consol No. 9 coal mine in Farmington, West Virginia on November 20,
1968. The explosion was caused by excessive accumulation of methane gas in the mine.
The plaintiffs alleged that an employee of Mountaineer Coal Company, a wholly owned
subsidiary of defendant Consolidation Coal Company that operated the mine under the
direction of and control of Consolidation Coal, deliberately rendered inoperable a mine
safety system resulting in the miners’ deaths. This safety system would have shut down
electric power in the mine when ventilation was inadequate, and would have alerted
miners to this dangerous condition.
Federal and state officials investigated the cause of the explosion for over two
decades. In September 1970, Larry Layne, an inspector for the United States Department
of Labor, Mine Safety and Health Administration (MSHA), drafted a memorandum (the
Layne memorandum) stating that an unnamed electrician had reported to him that the
safety system “had been rendered inoperable before the explosion . . . [and] had been
bridged with jumper wires; therefore when the [ventilation] fan would stop or slow down,
there was no way of anyone knowing about it because the alarm signal was bypassed.”
Layne omitted the reporting electrician’s name from the memorandum at the electrician’s
request. The Layne memorandum was not discovered by the plaintiffs until 2008.
While federal and state authorities continued to investigate the cause of the
explosion, the estates of several of the deceased miners filed three separate lawsuits
against Consolidation Coal. The claims of the estates in the first two lawsuits were
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dismissed. In the third case, the estates alleged, among other things, that Consolidation
Coal had concealed the cause of the explosion. A settlement ultimately was reached in
that case. At the time of all these lawsuits, the plaintiffs were not aware that anyone had
acted intentionally to disable the mine safety system.
In March 1990, the MSHA issued a report detailing the results of its investigation.
The report concluded that an accumulation of methane gas in the mine due to “inadequate
ventilation and the lack of sufficient ventilation controls” had contributed to the
explosion. The MSHA also found that the safety system “was not operating properly at
the time the explosion occurred, as mining operations continued . . . after the
explosion.”
As noted above, the plaintiffs became aware of the Layne memorandum in 2008.
And in 2009, the plaintiffs discovered a copy of a fan recording chart that allegedly had
been removed from the mine shortly after the explosion, and had been altered purportedly
in an attempt to conceal Consolidation Coal’s culpability in the explosion.
On June 9, 2014, the plaintiffs first learned that the individual who had
intentionally disabled the safety system was Alex Kovarbasich, the chief electrician at the
mine and “a member of mine management.” The plaintiffs alleged that Kovarbasich was
“acting under the direction and control of” Consolidation Coal when he tampered with
the safety system.
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The plaintiffs filed the present action in the Circuit Court of Marion County, West
Virginia on November 6, 2014, against the Estate of Alex Kovarbasich 1 and
Consolidation Coal. The defendants removed the case to the United States District Court
for the Northern District of West Virginia.
The plaintiffs alleged a single claim for “fraud, concealment and nondisclosure,”
claiming that Consolidation Coal deliberately concealed the fact that Kovarbasich
disabled the safety system and, thus, concealed the true causes of the explosion. The
plaintiffs contended that this act of fraudulent concealment “deprived [them] of their right
to obtain relief against defendants under West Virginia’s wrongful death statute[,] W. Va.
Code § 55-[7]-6 (1967).” Accordingly, the plaintiffs sought damages under West
Virginia Code § 55-7-6 (1967), in the amount of $110,000 “per class member for the
wrongful death of each deceased coal miner,” plus punitive damages.
The district court dismissed the complaint in its entirety under Federal Rule of
Civil Procedure 12(b)(6). With regard to the plaintiffs’ claim for fraudulent concealment,
the district court held that West Virginia never has recognized a fraudulent concealment
claim involving a wrongful death. The court further concluded that even if such a claim
were cognizable, the fraudulent concealment claim was barred by the two-year statute of
limitations of West Virginia Code § 55-2-12, because the plaintiffs learned in 2008, six
years before filing suit, that the mine safety system intentionally had been disabled. The
plaintiffs appealed.
1
Kovarbasich died in 1992. The district court dismissed Kovarbasich’s estate
from the case, and that decision is not at issue in this appeal.
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II.
A.
Acknowledging the lack of analogous precedent, the plaintiffs assert that they
have alleged all the elements of a fraudulent concealment claim under West Virginia law,
namely, that Consolidation Coal engaged in “the active concealment of information from
[the plaintiffs] with the intent to thwart [the plaintiffs’] efforts to conduct an
investigation, relating to such information.” Kessel v. Leavitt, 511 S.E.2d 720, 753 (W.
Va. 1998). And the plaintiffs emphasize that, under West Virginia law, “a lack of
precedent—standing alone—is an insufficient reason to deny a cause of action.” Id. at
755 (quoting Farley v. Sartin, 466 S.E.2d 522, 533 (1995)).
In response, Consolidation Coal maintains that West Virginia does not recognize
an independent claim for fraudulent concealment when the damage resulting from the
alleged concealment was the plaintiffs’ loss of a timely wrongful death claim. In
Consolidation Coal’s view, any claim related to a wrongful death may only be brought
under the wrongful death statute, W. Va. Code §§ 55-7-5, 55-7-6.
We have not found any West Virginia authority that definitively answers the
question presented. Thus, we conclude that the question whether a fraudulent
concealment claim is cognizable under West Virginia law when the alleged damage
sustained was the loss of a timely claim for wrongful death warrants certification to the
Supreme Court of Appeals of West Virginia.
B.
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The plaintiffs also argue that their claim did not accrue until 2014, when they first
learned that Kovarbasich was the individual who disabled the safety system. In the
plaintiffs’ view, they were required to allege that the person who allegedly caused the
miners’ deaths by disabling the safety system was a member of “mine management,” who
had undertaken the act at the direction of Consolidation Coal. Thus, the plaintiffs argue
that until they knew the identity and employment status of the individual wrongdoer, they
could not allege a sufficient claim that Consolidation Coal acted to “cover up” its own
transgression by concealing evidence of Kovarbasich’s conduct.
In response, Consolidation Coal argues that even if the plaintiffs’ fraudulent
concealment claim is cognizable under West Virginia law, the claim is barred by the two-
year statute of limitations provided in West Virginia Code § 55-2-12. Consolidation Coal
contends that, at the latest, the plaintiffs’ action accrued when they discovered the Layne
memorandum in 2008, thus rendering untimely the plaintiffs’ fraudulent concealment
claim filed in 2014. According to Consolidation Coal, the plaintiffs could have brought a
fraudulent concealment claim when they knew in 2008 that the safety system in the mine
intentionally had been disabled.
Claims for fraudulent concealment in West Virginia are subject to a two-year
statute of limitations. See W. Va. Code § 55-2-12. Under West Virginia’s discovery
rule, the limitations period begins to run when a plaintiff “knew, or by the exercise of
reasonable diligence should have known, of the elements of a possible cause of action,”
namely, “(1) that the plaintiff has been injured, (2) the identity of the entity who owed the
plaintiff a duty to act with due care, and who may have engaged in conduct that breached
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that duty, and (3) that the conduct of that entity has a causal relation to the injury.” Dunn
v. Rockwell, 689 S.E.2d 255, 262, 265 (W. Va. 2009) (quoting Syl. Pt. 4, Gaither v. City
Hosp., Inc., 487 S.E.2d 901 (W. Va. 1997)).
In the present case, it is not clear for purposes of applying the discovery rule,
whether the plaintiffs “knew, or by the exercise of reasonable diligence should have
known, of the elements of a possible” fraudulent concealment claim (1) when they
learned in 2008 that the safety system intentionally was disabled by an individual in the
Consolidation Coal mine; or (2) when they discovered in 2014 that the individual who
disabled the system was a member of mine management allegedly acting under the
direction of Consolidation Coal. Id. at 265. Under the argument advanced by the
plaintiffs, a claimant would not know whether he had a potential fraudulent concealment
claim against a corporate entity until he also knew, or had reason to know, that the person
who had sabotaged the mine safety system acted at the direction of the corporate entity.
Thus, the plaintiffs maintain that they did not know, and by the exercise of reasonable
diligence would not have known, of this element of their fraudulent concealment action
until they learned that an employee acting at the direction of Consolidation Coal had
caused the miners’ deaths. Rejecting this argument advanced by the plaintiffs, the district
court concluded that the plaintiffs could have asserted any fraudulent concealment claim
against Consolidation Coal in 2008, when the plaintiffs learned from the Layne
memorandum that the safety system intentionally had been “bypassed,” and that
Consolidation Coal had concealed this fact.
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We have not found any West Virginia authority that definitively answers this
question concerning application of West Virginia’s discovery rule. We therefore
conclude that the second question stated above likewise warrants certification to the
Supreme Court of Appeals of West Virginia.
III.
Under the privilege made available by the West Virginia Uniform Certification of
Questions of Law Act, it is hereby ORDERED: (1) That the questions stated above be,
and the same hereby are, certified to the Supreme Court of Appeals of West Virginia; (2)
that the Clerk of this Court forward to the Supreme Court of Appeals of West Virginia,
under the official seal of this Court, a copy of this order and, to the extent requested by
the Supreme Court of Appeals of West Virginia, the original or a copy of the record in
this Court; and (3) that any request for all or part of the record be fulfilled by the Clerk of
this Court simply upon notification from the Clerk of the Supreme Court of Appeals.
The names and addresses of counsel of record for the parties are:
Counsel for the plaintiffs, Michael D. Michael, et al.
Scott S. Segal
Segal Law Firm
810 Kanawha Boulevard, East
Charleston, WV 25301
Timothy C. Bailey
Bailey, Javins & Carter, LC
P. O. Box 3712
Charleston, WV 25337
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Mark Andrew Barney
Barney Law PLLC
P. O. Box 505
Hurrican, WV 25526
Connard Paul Estep
Estep & Shaffer, LC
212 West Main Street
Kingwood, WV 26537
Samuel A. Hrko
Bailey & Glasser, LLP
209 Capitol Street
Charleston, WV 25301
Counsel for the defendant, Consolidation Coal Company
William H. Jernigan
Dinsmore & Shohl LLP
P.O. Box 11887
Suite 600
Charleston, WV 25339
Alex Manuel Greenberg
Dinsmore & Shohl LLP
Suite 310
215 Don Knotts Boulevard
Morgantown, WV 26501
Christopher Michael Jones
Dinsmore & Shohl LLP
Suite 310
215 Don Knotts Boulevard
Morgantown, WV 26501
William E. Robinson
P. O. Box 11887
Charleston, WV 25339
This Order is entered by Circuit Judge Keenan with the concurrences of Chief
Judge Gregory and Judge Motz.
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QUESTIONS CERTIFIED
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