CHARLESTON – Progressive Classic Insurance must pay thousands of dollars for thumbing its nose at Harrison Circuit Judge Thomas Bedell, the Supreme Court of Appeals decided on Oct. 13.
The Justices found that Bedell properly imposed a $5,000 civil penalty last November after holding Progressive in contempt for failure to obey a subpoena.
Bedell ruled that the penalty would grow by $750 a day. Now, with the approval of the Justices, he can figure out how many days to count against Progressive.
At oral arguments before the Justices on Sept. 23, Carter Elkins of Huntington claimed Progressive wasn't a party to the case and didn't receive proper service of the subpoena.
Progressive knew about the subpoena, however, and the Justices couldn't understand why the insurer didn't send someone to Bedell's court.
Justice Menis Ketchum said, "I never lost a case where the other side didn't show up."
In 2006, Progressive policyholder Dina McKinney drove her car into the rear of another car waiting for a green light and started a four car chain reaction accident.
One of the drivers, Judith Swoger, sued McKinney in 2008.
Swoger's lawyer, David Romano of Clarksburg, issued a subpoena requiring Progressive to send a witness to a deposition on Sept. 4, 2008.
West Virginia Secretary of State Betty Ireland accepted service under West Virginia law that makes her attorney in fact for legal service on all licensed insurers.
Ireland forwarded the subpoena to Progressive's registered agent, CT Corporation.
Romano also mailed a copy of the subpoena to Progressive claims representative Michael Eaton in Charleston.
Progressive didn't object, respond, or send anyone to the deposition.
On Sept. 10, Swoger moved for a finding of contempt. Bedell gave Progressive a week to respond, and Progressive didn't respond.
On Oct. 1, Bedell found Progressive in contempt. He awarded Swoger $1,062.50 in costs and fees and directed Progressive to appear at Romano's office on Oct. 29.
Progressive claims counsel James Dodrill sent a letter to Romano asserting that the insurer didn't authorize the Secretary of State to accept service.
Dodrill's next letter stated that Progressive would not appear on Oct. 29.
Progressive didn't appear, and Swoger moved for contempt sanctions.
Bedell held a hearing on sanctions, and Progressive didn't appear.
On Nov. 21, Bedell imposed a $5,000 penalty plus $750 a day.
On Dec. 8, he awarded Swoger $562.50 in costs and fees.
At last, Progressive decided to honor Bedell's jurisdiction. The insurer filed a motion to set aside his orders.
He held a hearing, with Progressive in court, and after it he denied the motion.
Progressive petitioned the Supreme Court for a writ of prohibition. That froze the daily penalty but it didn't accomplish anything else.
At oral arguments, Ketchum told Elkins that Progressive could have showed up for the deposition and asked the Supreme Court for a writ against the subpoena.
Ketchum said, "You are asking us to pull your feet out of the fire from thumbing your nose at the court."
Chief Justice Brent Benjamin asked why Progressive didn't move to quash the subpoena. Elkins said he didn't know.
Justice Robin Davis said, "I think Mr. Romano can read the rules as well as anybody in this courtroom."
Romano said, "This was proper service without question."
He said Progressive didn't move to quash because it had no grounds to quash.
He said, "We were going to go to Bridgeport and take their furniture. They finally called and said they were willing to post a bond."
The Justices upheld Bedell, concluding that Swoger properly served Progressive.