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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NORTH CAROLINA COURT OF APPEALS
Filed: 06 February 2007
BOBBY DAVIS BRASWELL,
No. 04 CVS 1363
ST. PAUL MERCURY INSURANCE COMPANY,
and FIDELITY AND GUARANTY INSURANCE
Appeal by defendant from judgment entered 24 October 2005 by
Judge Jay D. Hockenbury in Wayne County Superior Court. Heard in
the Court of Appeals 14 September 2006.
Haithcock, Barfield, Hulse & Kinsey, PLLC, by Glenn A.
Barfield, for plaintiff-appellee.
Wilson & Coffey, L.L.P., by G. Gray Wilson, and Hunton &
Williams L.L.P., by Paul Janaskie, for defendant-appellant.
The criminal acts exclusion contained in defendant's policy of
insurance precluded coverage for plaintiff's intentional sexual
assaults. The trial court's granting of partial summary judgment
in favor of plaintiff on the question of defendant's duty to defend
was in error. The trial court's denial of defendant's motion for
summary judgment, based upon the exclusion, was also in error.
Plaintiff, Bobby Davis Braswell (Braswell), was employed by
Wayne County as a deputy sheriff when he engaged in numerous sexualassaults on several incarcerated female prisoners. On 7 September
1999, Braswell was indicted on twelve counts of sexual activity by
a custodian pursuant to N.C. Gen. Stat. § 14-27.7, nine counts of
crime against nature pursuant to N.C. Gen. Stat. § 14-177, and one
count of attempted crime against nature pursuant to N.C. Gen. Stat.
§§ 14-177 & 14-2.5, against five different victims. On 22 May
2001, Braswell entered pleas of guilty pursuant to North Carolina
v. Alford, 400 U.S. 25, 27 L. Ed. 2d 162 (1970), to four counts of
sexual activity by a custodian and one count of attempted crime
against nature; one charge for each of the victims. Pursuant to
the terms of the plea agreement, the State dismissed the remaining
charges against Braswell.
On 22 June 2001 a civil suit was filed by two of the victims
in the United States District Court for the Eastern District of
North Carolina asserting claims for monetary damages arising out of
Braswell's conduct. Braswell was named as a defendant both in his
individual capacity and in his official capacity. Also named as
defendants were Wayne County Sheriff Carey Winders, both
individually and in his official capacity, and Wayne County.
Defendant, St. Paul Mercury Insurance Company (St. Paul), had in
effect a general liability insurance policy as well as a law
enforcement liability insurance policy issued to Wayne County, the
employer of Braswell, during the time that the sexual assaults
Upon receipt of the summons and complaint in the federal court
action, St. Paul gave notice that while it would provide a defenseto Sheriff Winders, it would not provide a defense to Braswell,
Deputy Braswell will not be afforded a defense
by St. Paul inasmuch as his alleged acts were
not in the course and scope of his employment,
plus due to the fact that he has pled guilty
in criminal court to committing the acts
alleged by the plaintiffs. Exclusions in the
policies exclude coverage for criminal acts
and the willful violation of penal statutes.
On 22 April 2002, St. Paul settled the claims of one of the victims
in the federal lawsuit, resulting in the release of all claims
against all defendants, including Braswell. On 20 September 2002,
St. Paul settled a portion of the claims of the remaining plaintiff
in the federal lawsuit, resulting in the release of all claims
against the other defendants, and including claims against Braswell
in his official capacity. Specifically excluded from this
settlement were claims against Braswell individually. These claims
were subsequently tried before Judge Terrence Boyle, resulting in
a judgment being entered against Braswell on 17 December 2002, for
a sum in excess of five million dollars.
On 15 June 2004, Braswell filed this action in the Superior
Court of Wayne County asserting the following claims against St.
Paul: (1) damages arising out of St. Paul's unwarranted refusal to
provide a defense to him in the federal action; (2) St. Paul's
refusal to pay the judgment rendered against him; and (3) treble
damages and attorney's fees for unfair and deceptive trade
practices under N.C. Gen. Stat. Chapter 75. Defendant filed answer
denying the allegations of the complaint, asserting numerous
affirmative defenses and a counterclaim for declaratory judgmentthat it had no duty to defend Braswell in the federal court action
and no duty to indemnify him for the damages awarded in that suit.
On 27 July 2005, St. Paul moved for summary judgment on each
of Braswell's claims. By order dated 13 October 2005, Judge
Hockenbury denied St. Paul's motion for summary judgment, and
pursuant to Rule 56(c) of the N.C. R. Civ. P., granted summary
judgment in favor of plaintiff only on the issue of whether St.
Paul Mercury Insurance Company had and breached a duty to defend
the plaintiff in the 'Federal Action' referenced in paragraph ten
of plaintiff's amended complaint. The trial court's order did not
finally adjudicate plaintiff's claims for damages and unfair and
deceptive trade practices. However, the trial court certified its
order for immediate appeal pursuant to N.C. R. Civ. P. 54(b). St.
A. Appealability of Order
The trial court's order only disposed of a portion of
plaintiff's claims, thus we must decide the threshold question of
whether this matter is properly before us. Orders disposing of
fewer than all claims may be appealed immediately where they affect
a substantial right under N.C. Gen. Stat. §§ 1-277 & 7A-27 or where
there is a certification by the trial court pursuant to N.C. R.
Civ. P. 54(b). Judge Hockenbury's order is a final judgment as to
plaintiff's claim pertaining to St. Paul's duty to defend. This
finality, coupled with the trial court's certification that thereis no just cause for delay of an appeal of the court's ruling
allows this Court to consider this appeal.
The question presented is identical to that decided in Gilbert
v. N.C. Farm Bureau Mutual Ins. Co., 155 N.C. App. 400, 574 S.E.2d
115 (2002), aff'd per curiam 357 N.C. 244; 580 S.E.2d 691 (2003).
In that case the trial court ruled in favor of plaintiff on a
coverage question which did not dispose of all claims pending in
the lawsuit. The trial court certified its order pursuant to N.C.
R. Civ. P. 54(b). This Court held that the order is properly
before this Court. Id. 155 N.C. App. at 403, 574 S.E.2d at 118.
Subsequent panels of the Court of Appeals are bound by decisions of
prior panels on the same issue. In re Appeal from Civil Penalty,
324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989). We hold that this
appeal is properly before us.
B. Exclusion Provisions in Policy Bar Coverage
In its first argument, St. Paul contends that the criminal
acts exclusion contained in its policy bars any coverage for
Braswell's conduct, and relieved it of any duty to defend Braswell
in the federal lawsuit. We agree.
We review a trial court's grant of summary judgment de novo.
Nelson v. Hartford Underwriters Ins. Co., __ N.C. App. __, __, 630
S.E.2d 221, 229 (2006). Whether coverage exists under a policy of
insurance is a question of law, which can be properly disposed of
under summary judgment. Production Sys., Inc. v. Amerisure Ins.
Co., 167 N.C. App. 601, 604, 605 S.E.2d 663, 665 (2004). In
reviewing the propriety of summary judgment, the appellate court isrestricted to assessing the record before it. Only those pleadings
and other materials that have been considered by the trial court
for purposes of summary judgment and that appear in the record on
appeal are subject to appellate review. Waste Management of
Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 690, 340 S.E.2d
374, 377 (1986) (internal citations omitted).
The parties are in agreement that the law enforcement
liability policy is the insurance policy applicable to Braswell's
claims in the instant lawsuit. This policy contains the following
exclusion for criminal or dishonest acts:
Exclusions - What We Won't Cover
Criminal or dishonest acts. We won't cover
injury or damage that results from any
criminal, dishonest, or fraudulent act or
by the protected person; or
with the consent or knowledge of the
However, we won't apply this exclusion unless
there has been a court determination that
criminal, dishonest, or fraudulent conduct was
committed by the protected person or with the
consent or knowledge of the protected person.
While there is a substantial question as to whether there is
coverage under the policy for Braswell's conduct (See Young v.
Great American Ins. Co. of N.Y., 162 N.C. App. 87, 93, 590 S.E.2d
4, 8 (2004) (Hunter, J., dissenting), rev'd per curiam per dissent,
359 N.C. 58, 602 S.E.2d 673 (2004)), for purposes of this analysis,
we assume that there was such coverage. This Court will interpret an insurance policy's plain and
unambiguous language without rewriting the contract or
disregarding the express language used. Fidelity Bankers Life
Ins. Co. v. Dortch, 318 N.C. 378, 380, 348 S.E.2d 794, 796 (1986).
If no definition is given for a non-technical term, it is to be
given its ordinary meaning unless its context clearly indicates
another meaning was intended. Cherry v. State Farm Mutual
Automobile Ins. Co., 162 N.C. App. 535, 537, 590 S.E.2d 925, 928
(2004) (citations omitted). The insurer bears the burden of
proving that a policy exclusion applies to bar insurance coverage.
The exclusion contained in the law enforcement liability
policy has two parts. The first part provides that there is no
coverage for criminal, dishonest, or fraudulent acts. This
provision is however limited by the second part of the exclusion,
which requires that it is not applicable without a court
determination that criminal, dishonest, or fraudulent conduct was
committed. There is no dispute that acts of sexual assaults upon
female prisoners by Braswell would be criminal acts within the
meaning of the first part of the exclusion provision. Rather, the
legal dispute between the parties focuses on the second part of the
Braswell was indicted on five charges of sexual activity by a
custodian with respect to the victim who obtained a verdict against
him in the federal lawsuit. Braswell pled guilty to one charge of
sexual activity by a custodian pertaining to this victim pursuantto a plea agreement. Thus, there was a court determination that
criminal conduct was committed by Braswell. This would exclude
coverage for Braswell's acts under the law enforcement liability
However, Braswell contends that since he only pled guilty to
one of the five criminal charges related to the victim that the
second portion of the exclusion is inapplicable to the other four
charges. He asserts that there was no court determination as to
those four charges. This argument is predicated upon the theory
that each criminal act of Braswell should be treated as a
completely separate and distinct act for purposes of the exclusion.
Braswell's conduct consisted of a series of acts committed
against five different victims, occurring over approximately a two
year period. These acts resulted in twenty-one felony indictments
and one misdemeanor charge. Braswell pled guilty to five separate
charges, one for each of the five victims. We construe the term
conduct in the second part of the exclusion to be broader in
scope than the term acts in the first part of the exclusion. So
long as there has been a court determination of Braswell's criminal
conduct, it is not necessary that there be a court determination as
to each individual act. To construe the policy language otherwise
would be illogical. If a defendant committed a series of 100
crimes but was only charged and convicted of five, then under
Braswell's construction of the policy the exclusion would only
apply to five charges. We hold that Braswell's five guilty pleas
to charges arising out of his course of conduct triggered theapplication of the second part of the exclusion clause, and barred
coverage under the law enforcement liability policy.
We hold that the undisputed facts in this matter demonstrate
that St. Paul has met its burden in showing that the exclusion
applies to bar coverage in this matter.
C. Duty to Defend
As a general rule, an insurer's duty to defend is broader than
its duty to pay damages under a policy of insurance. Waste
Management, 315 N.C. at 691, 340 S.E.2d at 377.
An insurer's duty to defend is ordinarily
measured by the facts as alleged in the
pleadings; its duty to pay is measured by the
facts ultimately determined at trial. When the
pleadings state facts demonstrating that the
alleged injury is covered by the policy, then
the insurer has a duty to defend, whether or
not the insured is ultimately liable.
Conversely, when the pleadings allege facts
indicating that the event in question is not
covered, and the insurer has no knowledge that
the facts are otherwise, then it is not bound
Id. (citations omitted).
In the instant case, Braswell entered his guilty pleas prior
to the filing of the federal court action resulting in the judgment
against him. St. Paul made it clear from the outset that its
denial of coverage for Braswell was, in part, based upon the
exclusion for criminal acts. As discussed above, this exclusion
barred coverage for Braswell under the law enforcement liability
policy. Construing the pleadings and exclusion together, it is
clear that the federal court action was based upon criminal conduct
for which a court determination had been made in Wayne CountySuperior Court. Under the rationale of Waste Management
, St. Paul
did not have a duty to defend Braswell in the federal court action.
D. Other Claims
Since we have held that there was no coverage by virtue of the
exclusion in the policy, and no duty to defend, Braswell's claim
for unfair and deceptive trade practices act claim must also fail.
The trial court erred in granting partial summary judgment for
Braswell and denying St. Paul's motion for summary judgment. This
matter is remanded to the trial court for entry of judgment in
favor of St. Paul, dismissing all of Braswell's claims, with
REVERSED and REMANDED.
Judges LEVINSON and STEPHENS concur.
Report per Rule 30(e).
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