OPINION ISSUED FEBRUARY 14, 1989
DEMOTTO PEERLESS COAL COMPANY, INC.
COAL-WORKERS' PNEUMOCONIOSIS FUND
LEADER COAL COMPANY, INC.
COAL-WORKERS' PNEUMOCONIOSIS FUND
Michael E. Hooper, Attorney at Law, for claimants.
Robert D. Pollitt, Senior Assistant Attorney General, for
These claims were consolidated for submission to the Court. The
were brought by
claimants to recover attorney's fees expended in the defense of a
action brought by trustees
for the United Mine Workers' of America 1950 Benefit Plan and Trust
(hereinafter referred to as
the U.M.W.A.) against claimants, in the United States District
the Northern District of
West Virginia, for reimbursement of medical expense payments it
treatment of union
members for pneumoconiosis-related illnesses. The U.M.W.A.
that medical services
rendered to miners and paid for by the U.M.W.A. were attributable
Black Lung disease. The
miners were entitled to have their employers pay for the medical
services rather than the
U.M.W.A.. However, the U.M.W.A. demanded reimbursement for these
of coal companies and their insurers.
The claimants herein were two defendants named in a civil action
on October 31, 1986,
in United States District Court by the U.M.W.A. against forty-four
as subscribers to the West Virginia Coal Workers' Pneumoconiosis
filed a third party
complaint against respondent herein for indemnification of any
as respondent is their
insurer under the Black Lung Benefits Act. Respondent answered the
party complaint and
claimed to be without sufficient knowledge to affirm or deny
would be responsible to
claimants for indemnification of any liability resulting from the
federal court case.
On May 22, 1987, correspondence from claimants made a demand for
respondent to issue an
assurance that the respondent would pay any liability incurred by
claimants in the pending federal
litigation. Claimants also demanded that respondent indemnify and
claimants harmless for
any and all liability, and, that as a result of its failure to
acknowledge this duty, respondent was
also responsible for all reasonable attorneys' fees.
On November 19, 1987, respondent assured claimants by letter than
indemnify claimants for any medical expense benefits determined to
owing to the U.M.W.A.
from claimants in the pending federal litigation. However,
also informed claimants
that respondent would not assume the legal defense of the claimants
reimburse claimants for
their attorneys' fees incurred in defending the pending litigation.
Respondent entered into negotiations with the U.M.W.A. to settle
federal action on behalf
of claimants and the other coal companies named as party
December 12, 1987,
a settlement was reached by the parties. Thereupon, the federal
litigation against claimants was
dismissed with prejudice on January 20, 1988.
Claimants allege that respondent is liable for their attorneys'
under the doctrine of
equitable subrogation and for the reason that respondent breached
duty of good faith and fair
dealing and has likewise acted contrary to law and in bad faith.
The respondent contends that the demands in the federal litigation
against claimants were not
supported by sufficient documentation to assure that their payments
the requirements for
reimbursement as Black Lung medical expenses. These claims should
denied as there is no
provision of law which allows the payment of attorneys' fees by
respondent; there was no
contract between the parties which requires such a payment; and
respondent did not willfully fail
to obey the law.
The Court is of the opinion that claimants are not entitled to
attorney fees in these
particular claims. There is no statutory authority for the payment
attorney fees by respondent
to claimants. The traditional rule in this State is that without an
express statutory authority the
litigants bear their respective fees and costs. The West Virginia
Supreme Court case of Nelson
vs. W.Va. Public Employees Ins. Bd., 300 S.E.2d 86 (1982) reviews
law of West Virginia
regarding attorney fees. In Nelson, the Supreme Court ordered the
payment of attorney fees by
a State agency when it was determined that the actions of the
respondents therein evidenced a
deliberate disregard of mandatory provisions in the West Virginia
The Supreme Court
held that "A well established exception to the general rule
the award of attorney fees
in the absence of statutory authorization, allows the assessment of
against a losing party
who has acted in bad faith, vexatiously, wantonly or for oppressive
reasons." The reasoning in
the Nelson case does not apply to the claims before this Court. The
respondent was negotiating
with the U.M.W.A. for settlement of the pending federal case.
Substantial dollars were in
question. The respondent may have been remiss in failing to answer
correspondence in a timely
manner to assure claimants of its intentions to represent them in
federal case; however, there
were extenuating circumstances for respondent during the time
i.e., change of counsel and
change in Commissioners.
For these reasons, the Court is of the opinion to, and does,