CHARLESTON — The West Virginia Supreme Court of Appeals ruled that a lower court rightly enforced a settlement agreement and denied an amended complaint request.
Rex Donahue appealed an order from Cabell Circuit Court that enforced a settlement agreement between him and his insurer, Allstate, relating to water damage occurring at the real property he owned.
The order also denied Donahue's motion to amend his complaint or, alternatively, allow the filing of a new complaint so as to allege claims of breach of contract and insurance bad faith against Allstate.
Donahue contended that while he agreed to dismiss his claim against Allstate regarding the payment of a debt he owed for water mitigation services performed as a result of the water damage, there was no meeting of the minds regarding his agreement to dismiss any claims against Allstate for denying coverage for the damage sustained and insurance bad faith.
"Upon review of the parties' briefs, appendix record, oral argument, and applicable legal authority, and for the reasons stated below, we affirm the circuit court’s order enforcing the settlement agreement between petitioner and Allstate and denying petitioner’s request to amend his complaint or allow the filing of a new complaint," the Supreme Court opinion states.
Chief Justice John Hutchison authored the opinion.
Donahue made a claim in January 2018 with Allstate on a landlord's package policy for rental property damages after several water pipes froze and burst. Allstate denied the claim, citing that the policy included an exclusion for property damages caused by failure to maintain adequate heat in a residence.
Mammoth Restoration and Cleaning filed a complaint against Donahue for $6,301.11 for services it performed on the property and Donahue then filed a complaint against Allstate, stating that Allstate insured the property and had selected Mammoth for the services and then denied coverage.
Donahue contended that Allstate should be responsible for the payment. Allstate denied the allegations.
On June 28, 2019, negotiations were made and Donahue released all claims against Allstate and Allstate agreed to satisfy the claim against him by Mammoth.
However, Donahue failed to execute and return the settlement agreement and Allstate filed a motion to enforce the settlement. Donahue then argued that although he had agreed to settle, he was seeking costs associated with the water mitigation services and that he did not agree to release claims against Allstate for water damage to his property.
"We find that the circuit court correctly refused to grant petitioner permission to file the proposed amended or new complaint against Allstate insofar as we have already concluded that the court properly found that the settlement agreement between Allstate and petitioner resolved the very same claims," Hutchison wrote.
West Virginia Supreme Court of Appeals case number: 20-0343
