1. Immunity_governmental_negligent building inspection_accidental_insurance
coverage
An allegedly negligent building inspection was an accident under Wayne County's
insurance policy, the policy covered the claim, immunity was waived, and the trial court properly
denied the County's motion for summary judgment. Although the inspection and issuance of a
certificate of occupancy were intentional, it was neither intended nor expected that plaintiff's
property would be rendered uninhabitable and that plaintiff would suffer health problems.
2. Immunity_governmental_claims against building inspector and county_not
duplicative_same immunity
The trial court did not err by denying a building inspector's motion to dismiss a claim
against him in his official capacity where the County was not immune. The public officer holds
the same immunity, if any, as the governmental immunity; although the building inspector here
contended that claims were duplicative, a plaintiff may bring suit against both a governmental
entity and its public officer (with but one recovery).
3. Immunity_governmental_building inspector_public official
The trial court should have dismissed a claim against a building inspector in his individual
capacity because the inspector was a public official who may not be held personally liable for mere
negligence. The inspector's position was created by statute, he exercised a portion of the
sovereign power, and his work required discretion.
Morgan, Reeves & Gilchrist, by C. Winston Gilchrist; and Law
Offices of Jason Wunsch by Jason Wunsch, for plaintiff-
appellee.
Sumrell, Sugg, Carmichael, Hicks & Hart, P.A., by Scott C.
Hart, for defendant-appellants Wade and Wayne County.
Albert D. Kirby, Jr., for defendant-appellant Jerry Coker.
STEELMAN, Judge.
Plaintiff's residence was damaged by fire on 29 April 1998.
Plaintiff hired defendant Jerry Coker (Coker), an unlicensed
contractor holding himself out as being licenced, to rebuild and
repair her residence for $62,000.00. Coker applied for a building
permit from the Wayne County Inspections Department, listing the
cost of repair for the residence at $29,000.00, which was just
under the $30,000.00 limit requiring licensure. N.C. Gen. Stat. §
87-1 et. seq (2004). As Coker proceeded with the repairs,
defendant Wayne County (Wayne County) periodically inspected the
work. The majority of these inspections were conducted by
defendant Jimmy L. Wade (Wade, and together with Wayne County,
defendants). On 29 June 1999, Wade conducted a final inspection of
the residence and issued a Certificate of Occupancy.
Plaintiff's complaint alleges multiple claims against each of
the defendants. As to Coker, it is alleged that he performed
faulty work, resulting in “extensive toxic mold growth” at the
residence. As to defendants, plaintiff alleges negligence and
gross negligence for failure to properly inspect Coker's work,
wilful or negligent misrepresentations, and unfair and deceptive
trade practices. Wade was sued in both his individual and his
official capacity as a building inspector. Plaintiff seeks
monetary damages for property damage, personal injuries, exemplary
damages, and attorney's fees.
Plaintiff filed this action on 16 March 2004. Defendants
filed answer and motions to dismiss on 6 May 2004. These motionssought dismissal of the claims against Wade in both his individual
and official capacity. On 20 June 2004, defendants filed a motion
for summary judgment based in governmental immunity. On 18 August
2004, the trial court dismissed plaintiff's claims against Wayne
County for unfair and deceptive trade practices and denied the
defendant's other motions to dismiss and for summary judgment.
Defendants appeal. We affirm in part and reverse in part the order
of the trial court.
[1] In defendants' second argument they contend that the trial
court erred in denying defendant Wayne County's motion for summary
judgment based upon governmental immunity. We discuss this
argument first because it is partially determinative of another
issue. We disagree.
“Summary judgment is properly granted only 'if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that any party is entitled to a
judgment as a matter of law.'” Econo-Travel Motor Hotel Corp. v.
Taylor, 301 N.C. 200, 202, 271 S.E.2d 54, 57 (1980)(citations
omitted). “On appeal, our standard of review is (1) whether there
is a genuine issue of material fact and (2) whether the movant is
entitled to judgment as a matter of law.” NationsBank v. Parker,
140 N.C. App. 106, 109, 535 S.E.2d 597, 599 (2000)(citation
omitted). “The evidence presented is viewed in the light most
favorable to the non-movant.” Id. “The court is not authorized by Rule 56 to decide an issue of
fact. It is authorized to determine whether a genuine issue of fact
exists.” Moore v. Fieldcrest Mills, Inc., 296 N.C. 467, 470, 251
S.E.2d 419, 422 (1979)(citation omitted). “The purpose of summary
judgment is to eliminate formal trials where only questions of law
are involved by permitting penetration of an unfounded claim or
defense in advance of trial and allowing summary disposition for
either party when a fatal weakness in the claim or defense is
exposed.” Id. “Under the doctrine of governmental immunity, a
county is immune from suit for the negligence of its employees in
the exercise of governmental functions absent waiver of immunity.”
Evans v. Hous. Auth. of Raleigh, 359 N.C. 50, 53, 602 S.E.2d 668,
670 (2004). When a county purchases liability insurance, however,
it waives governmental immunity to the extent it is covered by that
insurance. N.C. Gen. Stat. § 153A-435(a)(2004). In the instant
case, defendant County of Wayne purchased an insurance policy (the
policy) from St. Paul Fire and Marine Insurance Co. (St. Paul).
The dispositive issue concerns whether that policy covered
defendant Wayne County for the acts alleged in plaintiff's
complaint. If the policy did provide coverage against the alleged
negligent acts of Wayne County's building inspector, then Wayne
County has waived its governmental immunity and its motion for
summary judgment was properly denied. It is defendants' burden to
show that no genuine issue of material fact exists that the policy
does not cover Wade's actions in the instant case. Marlowe v.
Piner, 119 N.C. App. 125, 127-28, 458 S.E.2d 220, 222 (1995). The policy is comprised of multiple coverage sections, each
providing different coverages, limits, and exclusions. Each
coverage is self-contained and will be examined separately. Two
policy sections are at issue in this appeal, the “Public Entity
Management Liability Protection” section [R. pp. 44-51], and the
“Public Entity General Liability Protection” section [R. pp. 154-
77]. The “Public Entity Management Liability Protection” section
includes a section titled Exclusions - What This Agreement Won't
Cover.
Injury or Damage. We won't cover loss
resulting from injury or damage.
Injury or Damage means:
* ... personal injury ...; or
* property damage.
Bodily Injury means any physical harm,
including sickness or disease, to the physical
health of any person.
Property Damage means:
* physical damage to tangible property of
others, including all resulting loss of use of
that property....
This Court has held that exclusionary provisions such as this
prevent recovery under a policy for damages due to negligent
building inspection. Norton v. SMC Bldg., 156 N.C. App. 564, 577
S.E.2d 310 (2003); Kennedy v. Haywood County, 158 N.C. App. 526,
529-30, 581 S.E.2d 119, 121 (2003). Thus as to the “Public Entity
Management Liability Protection” section of the policy, there is no
insurance coverage, and consequently no waiver of governmental
immunity. Wayne County also purchased coverage entitled “Public Entity
General Liability Protection”. The section entitled What This
Agreement Covers contains the following:
Bodily injury and property damage liability.
We'll pay amounts any protected person is
legally required to pay as damages for covered
bodily injury or property damage that:
* happens while this agreement is in effect;
and
* is caused by an event.
Event means an accident, including continuous
or repeated exposure to substantially the same
general harmful conditions.
We note that the definitions of bodily injury and property damage
are substantively identical to the definitions in the “Public
Entity Management Liability Protection Coverage” section above, and
that there is no dispute that Wayne County is a “protected person”
as defined in the policy. We also note that there is an extensive
list of exclusions in this section of the policy, including breach
of contract and deliberately breaking the law. This section of the
policy does not, however, contain any exclusion for injury or
damage similar to that contained in the “Public Entity Management
Liability Protection” section discussed above. Defendants make no
argument that the “Public Entity General Liability Protection”
section of the policy does not apply.
If the negligent building inspection of Wade was an accident,
then the policy provides coverage for the claims against Wayne
County, and it has waived governmental immunity. The policy does
not define “accident”. “Non-technical words are to be given theirmeaning in ordinary speech unless it is clear that the parties
intended the words to have a specific technical meaning.” Allstate
Ins. Co. v. Chatterton, 135 N.C. App. 92, 95, 518 S.E.2d 814,
816-17 (1999) (citations omitted), disc. review denied, 351 N.C.
350, 542 S.E.2d 205 (2000). “The words used in the policy having
been selected by the insurance company, any ambiguity or
uncertainty as to their meaning must be resolved in favor of the
policyholder, or the beneficiary, and against the company.”
Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 276 N.C.
348, 354, 172 S.E.2d 518, 522 (1970). “It is the general rule that
where a provision in a policy of insurance is susceptible of two
interpretations, when considered in light of the facts in the case,
one imposing liability, the other excluding it, the provision will
be construed against the insurer.” Roach v. Pyramid Life Ins. Co.,
248 N.C. 699, 701, 104 S.E.2d 823, 824-25 (1958).
“Policies of liability insurance as well as
property and personal injury insurance
frequently limit coverage to losses that are
caused by 'accident.' In attempting to
accommodate the layman's understanding of the
term, courts have broadly defined the word to
mean an occurrence which is unforeseen,
unexpected, extraordinary, either by virtue of
the fact that it occurred at all, or because
of the extent of the damage. An accident can
be either a sudden happening or a slowly
evolving process ....”
Black's Law Dictionary (8th ed. 2004), quoting John F. Dobbyn,
Insurance Law in a Nutshell 128 (1996). Under the definition of
accident in Black's we also find a definition for “culpable
accident”: “An accident due to negligence.” Id. There are cases in North Carolina interpreting policy language
similar, but not identical, to the relevant language in the instant
case. Waste Management of Carolinas, Inc. v. Peerless Ins. Co., 315
N.C. 688, 694, 340 S.E.2d 374, 379 (1986); Washington Hous. Auth.
v. North Carolina Hous. Auths. Risk Retention Pool, 130 N.C. App.
279, 285, 502 S.E.2d 626, 630 (1998); Wiggins v. Monroe, 73 N.C.
App. 44, 326 S.E.2d 39 (1985); Wilmington v. Pigott, 64 N.C. App.
587, 307 S.E.2d 857 (1983); Edwards v. Akion, 52 N.C. App. 688,
691, 279 S.E.2d 894, 896 (1981). In all of the insurance policies
in these cases, “event” (termed “occurrence”) is defined as “'an
accident, including continuous or repeated exposure to conditions,
which results in bodily injury or property damage neither expected
nor intended from the standpoint of the insured.'” Waste
Management, 315 N.C. at 694, 340 S.E.2d at 379 (emphasis added).
Much of the analysis in these cases focuses on whether the
damages incurred were expected or intended by the insured in light
of the conduct in question. In making that determination,
[t]he test should be “a subjective one, from
the standpoint of the insured, and not an
objective one asking whether the insured
'should have' expected the resulting damage,”
i.e., whether the resulting damage was
unexpected or unintended, not whether the act
itself was unintended. An “expected or
intended” exclusion applies only “if the
resulting injury as well as the act were
intentional.”
Washington Hous. Auth., 130 N.C. App. at 285, 502 S.E.2d at 630.
The Washington Hous. Auth. Court determined that a complaint
properly alleged an “accident” under the relevant insurance policy
where plaintiff alleged a government authority (Washington HousingAuthority) charged with maintaining a low income housing project
was negligent in its repair of plumbing leaks, termite control, and
maintenance of the property grounds, all resulting in significant
damages. In holding that this conduct constituted an “accident”
under the policy, this Court reasoned that though Washington
Housing Authority's actions were intentional, “the resulting damage
to the property occasioned thereby was not.” Id. at 285-86, 502
S.E.2d at 631. We hold that this reasoning applies in the instant
case. Though defendant Wade's acts inspecting plaintiff's property
and issuing a certificate of occupation were intentional, it was
neither intended nor expected that as a result of these acts
plaintiff's property would be rendered uninhabitable and plaintiff
would suffer health problems. Washington Hous. Auth., 130 N.C. App.
at 285, 502 S.E.2d at 630.
We note that to the extent the language of the instant policy
differs from that of the cited cases (by omitting “which results in
bodily injury or property damage neither expected nor intended from
the standpoint of the insured”), the case for defining “accident”
under the policy as covering the instant facts is strengthened, not
diminished. Further, even were we to conclude that it is
impossible on the facts at bar to determine whether the conduct in
the instant case constituted an “accident” under the policy, we
would be compelled to hold in favor of coverage. Wachovia, 276 N.C.
at 354, 172 S.E.2d at 522, Roach, 248 N.C. at 701, 104 S.E.2d at
824-25. We hold that the policy covers the conduct in question, and
that Wayne County has waived immunity to the extent of the
insurance coverage purchased. The trial court properly denied the
motion for summary judgment. This argument is without merit.
[2] In defendants' first argument, they argue that the trial
court erred in denying defendant Wade's motion to dismiss. We
agree in part.
Defendant Wade moved pursuant to Rule 12(b)(6) of the North
Carolina Rules of Civil Procedure to dismiss the claims against him
in both his official and individual capacity. Defendants first
contend that the trial court erred in failing to dismiss the claims
against him in his official capacity because they are duplicative
of plaintiff's claims against Wayne County. Defendants base their
argument on cases such as Moore v. City of Creedmoor, 345 N.C. 356,
481 S.E.2d 14 (1997) and Reid v. Town of Madison, 137 N.C. App.
168, 527 S.E.2d 87 (2000). Defendants are mistaken in this
reliance. These cases simply hold that because “official-capacity
suits 'generally represent only another way of pleading an action
against an entity of which an officer is an agent[,]'” Moore, 345
N.C. at 367, 481 S.E.2d at 21 (citations omitted), the officer
holds the same immunity, if any, that the governmental entity
holds. Therefore, if the governmental entity is immune from suit,
an officer properly acting in his official capacity is immune as
well. Reid, 137 N.C. App. at 172, 527 S.E.2d at 90. This does not
mean that a plaintiff may not bring suit against both the
governmental entity and its officer. Meyer v. Walls, 347 N.C. 97,111, 489 S.E.2d 880, 888 (1997). Of course, judgment against the
officer would be recovered from the governmental entity, and
plaintiff may have but one recovery. Because we have determined
that Wayne County is not immune from suit, we must also hold that
Wade is not immune in his official capacity. This argument is
without merit.
[3] Defendants next argue that the trial court erred in
failing to dismiss plaintiff's claims against Wade in his
individual capacity because he was entitled to immunity on those
claims.
Whether plaintiff states claims against defendant Wade in his
individual capacity sufficient to withstand a Rule 12(b)(6) motion
to dismiss hinges on whether defendant Wade was acting as a public
official or a public employee. “'It is settled in this
jurisdiction that a public official, engaged in the performance of
governmental duties involving the exercise of judgment and
discretion, may not be held personally liable for mere negligence
in respect thereto.' 'An employee, on the other hand, is
personally liable for negligence in the performance of his or her
duties proximately causing an injury.'” Isenhour v. Hutto, 350 N.C.
601, 609-10, 517 S.E.2d 121, 127 (1999)(citations omitted).
Our courts have recognized several basic
distinctions between a public official and a
public employee, including: (1) a public
office is a position created by the
constitution or statutes; (2) a public
official exercises a portion of the sovereign
power; and (3) a public official exercises
discretion, while public employees perform
ministerial duties. “Discretionary acts are
those requiring personal deliberation,decision and judgment.” Ministerial duties, on
the other hand, are absolute and involve
“merely [the] execution of a specific duty
arising from fixed and designated facts.”
Id. at 610, 517 S.E.2d at 127 (internal citations omitted). In
Pigott v. Wilmington, 50 N.C. App. 401, 404-05, 273 S.E.2d 752,
754-55 (1981), this Court determined that the chief building
inspector of the City of Wilmington was a public official, not a
public employee, based on the following analysis:
First, the position of chief building
inspector is “created . . . by legislation”
which authorizes every city in North Carolina
to create a building inspection department, to
appoint inspectors and to give the inspectors
so appointed titles “generally descriptive of
the duties assigned.” G.S. 160A-411 (Supp.
1979). Second, the chief building inspector is
“required to take an oath of office.” Third,
the chief building inspector performs “public
functions delegated to him as part of the
sovereign power of the state”; “official trust
or responsibility is imposed by law” on him;
“the law prescribes and imposes the duties” he
must perform; and he is “charged with fixed,
public duties” and “empowered to act in the
discharge of a duty or legal authority in
official life.” See G.S. 160A-411 to -438;
Fourth, the chief building inspector is
“vested with a certain measure of discretion.”
North Carolina General Statutes, Chapter 160A,
part 5 contains numerous provisions which can
only be interpreted as placing discretionary
powers in the inspectors designated and
appropriately entitled by the cities of this
State.
In the instant case, Wade is not the chief building inspector, and
there is no evidence from which to determine whether he was
required to take an oath of office. However, when we apply the
test laid out in Isenhour, guided by our holding in Pigott, we hold
that as a building inspector for the County of Wayne, Wade was apublic official. His position was created by statute, in that
position he exercises a portion of the sovereign power delegated to
him, through Wayne County, by statute, and work in his official
capacity requires that he exercise discretion.
The general rule regarding official immunity
is: “'As long as a public officer lawfully
exercises the judgment and discretion with
which he is invested by virtue of his office,
. . . keeps within the scope of his official
authority, and acts without malice or
corruption, he is protected from liability .'”
This Court has also held that, while “named
defendants may be shielded from liability in
their official capacities, they remain
personally liable for any actions which may
have been corrupt, malicious or perpetrated
outside and beyond the scope of official
duties.” To sustain the personal or
individual capacity suit, the plaintiff must
initially make a prima facie showing that the
defendant-official's tortious conduct falls
within one of the immunity exceptions, i.e.,
that the official's conduct is malicious,
corrupt, or outside the scope of official
authority.
Trantham v. Lane, 127 N.C. App. 304, 306-07, 488 S.E.2d 625, 627
(1997)(internal citations omitted. Plaintiff's complaint does not
allege that defendant Wade's conduct was malicious or corrupt.
Paragraph 28 of plaintiff's complaint states: “Wade was performing
acts for the County within the course and scope of employment at
all times material to this action.” We therefore hold that
plaintiff's complaint fails to state a claim against defendant Wade
in his individual capacity for which relief may be granted. The
trial court erred in failing to dismiss the claim against defendant
Wade in his individual capacity pursuant to Rule 12(b)(6), and thus
we reverse the order denying defendant Wade's motion to dismissthis claim, and remand to the trial court for entry of an order
granting this motion.
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
Judges TIMMONS-GOODSON and McCULLOUGH concur.
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