Herndon v. Barrett, No. 8927SC1397

• Decision Date: 19 February 1991
• Docket Number: No. 8927SC1397
• Citation: 101 N.C.App. 636,400 S.E.2d 767
• Parties: Lynda S. HERNDON, Plaintiff, v. Acting Chief Jackie BARRETT; Captain Bob Hayes; Sergeant James Camp and the City of Kings Mountain, a municipal corporation, Defendants and Third-Party Plaintiffs, v. Don JOHNSON and Grayton Bollinger, Third-Party Defendants.
• Court: North Carolina Court of Appeals

Page 767

400 S.E.2d 767

101 N.C.App. 636

Lynda S. HERNDON, Plaintiff, v. Acting Chief Jackie BARRETT; Captain Bob Hayes; Sergeant

James Camp and the City of Kings Mountain, a municipal corporation, Defendants and Third-Party Plaintiffs, v. Don JOHNSON and Grayton Bollinger, Third-Party Defendants.

No. 8927SC1397.

Court of Appeals of North Carolina.

Feb. 19, 1991.

Horn, West & Horn, P.A. by C.A. Horn, Shelby, for plaintiff-appellee.

Malcolm B. McSpadden, Gastonia, for third-party defendant-appellee, Grayton Bollinger.

Sumrell, Sugg, Carmichael & Ashton, P.A. by James R. Sugg and Rudolph A. Ashton, III, New Bern, for defendants-appellants Acting Chief Jackie Barrett, Captain Bob Hayes, Sergeant James Camp and the City of Kings Mountain.

Corry, Cerwin & Coleman by Clayward C. Corry, Jr., Kings Mountain, for defendant-appellant City of Kings Mountain.

EAGLES, Judge.

At the outset, we note that "G.S. 1-277, in effect, provides that no appeal lies to an appellate court from an interlocutory order or ruling of the trial judge unless such ruling or order deprives the appellant of a substantial right which he would lose if the ruling or order is not reviewed before final judgment." Pruitt v. Williams, 288 N.C. 368, 371, 218 S.E.2d 348, 350 (1975). "Generally, the denial of summary judgment does not affect a substantial right and is not appealable." Corum v. University of North Carolina, 97 N.C.App. 527, 531, 389 S.E.2d 596, 598, temporary stay allowed, 326 N.C. 595, 394 S.E.2d 453, disc. rev. and writ of supersedeas allowed, motion to dismiss denied, 327 N.C. 137, 394 S.E.2d 170 (1990). However, the denial of a motion for summary judgment "on the grounds of sovereign and qualified immunity is immediately appealable." Id. at 532, 389 S.E.2d at 599; see also Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985). "In Mitchell, the Supreme Court held that 'denial of a substantial claim of absolute immunity is an order appealable before final judgment, for the essence of absolute immunity is its possessor's entitlement not to have to answer for his conduct in a civil damages action.' " Id. quoting Mitchell, 472 U.S. at 525, 105 S.Ct. at 2815, 86 L.Ed.2d at 424.

Here, defendants assert that the trial court denied defendants' motion to dismiss and alternative motion for summary judgment based on defendants' assertion of its sovereign immunity. Accordingly, defendants argue that they may immediately appeal the order and the adverse determination of the sovereign immunity issue.

Defendants assign as error the trial court's determination that there was insurance coverage. Defendants contend that the determination was premature and erroneous. Defendants further contend that the trial court's ruling that there was insurance coverage was fundamentally unfair since National Union Fire Insurance Company (hereinafter National Union) was not before the court. Defendants also contend that the trial court could not affirmatively decide the jurisdiction issue of insurance coverage at this stage of the proceeding and as a result the trial court's decision affects a substantial right. Defendants argue that at the very most the trial court "should have found that a factual dispute existed as to insurance coverage, and then set the case on for further hearing at the trial or after the trial." We disagree.

[U]nder the common law, a municipality is immune from liability for the torts of its officers committed while they were performing a governmental function. However, N.C.Gen.Stat. Sec. 160A-485(a) (1982) establishes an exception to the common-law rule: [Citations omitted.]

Any city is authorized to waive its immunity from civil liability in tort by the act of purchasing liability insurance. Immunity shall be waived only to the extent that the city is indemnified by the insurance contract from tort liability. No formal action other than the purchase of liability insurance shall be required to waive tort immunity, and no city shall be deemed to have waived its tort immunity by any action other than the purchase of liability insurance. [Citations omitted.]

Wiggins v. City of Monroe, 73 N.C.App. 44, 49-50, 326 S.E.2d 39, 43 (1985).

This court has previously decided that a trial court's consideration of the existence or nonexistence of insurance coverage as it relates to the issue of sovereign immunity is not inappropriate at this stage in the trial proceeding. Id. at 44, 326 S.E.2d at 39. In Wiggins the trial court granted summary judgment in favor of municipal defendants. On appeal one issue was whether the insurance policy purchased by the City of Monroe indemnified the City from liability for the torts alleged in that action. The fact that the City of Monroe's insurance carrier was not a party to that particular suit did not deter the Wiggins court from addressing whether there was in fact liability coverage under the policy in question.

Here, like Wiggins, defendants' motion to dismiss and alternative motion for summary judgment was based upon governmental immunity. Here, defendants submitted supporting affidavits to the trial court which showed that their carrier had written them stating that there was no insurance coverage. Defendants contended in their motion that governmental immunity was not waived since it could only be waived to the extent that the municipality was indemnified from tort liability by the insurance contract. After careful review of the record, the trial court denied the defendant City's motion for summary judgment. The legal significance of the trial court's ruling is that defendants had not carried their burden of proving that there was no genuine issue of material fact as to the nonexistence of insurance coverage.

In Wiggins, the City of Monroe, in support of its motion for summary judgment, included a letter from its insurance carrier which denied insurance coverage for the damages sustained as a result of the City's demolition of the plaintiff's home. The Wiggins court stated that it was "not bound by the insurance company's interpretation of its own policy's coverage." Wiggins, 73 N.C.App. at 50, 326 S.E.2d at 44.

Likewise, neither we nor the trial court are bound by National Union's interpretation of its policy's coverage. The National Union policy contains the following pertinent provisions: Coverage A, which applies to law enforcement employees only, provides that "[t]he company will pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as money damages because of any claim against the Insured, arising out of any Wrongful Act of the Insured acting in the Insured's capacity as a Law Enforcement Employee of the Employer, named in the Declarations, and caused by the Insured, while acting in their regular course of duty." Coverage B of the policy applies to all public employees/officials except for law enforcement employees and provides essentially the same coverage. The policy further provides in the exclusions applicable to Coverage A that it "applies to all Wrongful Acts, which shall mean any actual or alleged error or misstatement or misleading statement or act or omission or neglect or breach of duty including misfeasance, malfeasance and nonfeasance by an insured while acting within the scope of his professional duties for the employer...." In the exclusions applicable to Coverage B the policy provides that it does not apply to any claim related to injury arising from "bodily injury", "false arrest, assault or battery, detention, imprisonment, malicious prosecution or abuse of process," and "willful violation of any statute, ordinance, or regulation committed by or with the knowledge or consent of any Insured."

In the instant case the policy provides coverage for all "Wrongful Acts" which includes negligence and breach of duty. Plaintiff has alleged that defendants were negligent in failing "to take any corrective action to defuse the situation between Officers Johnson and Bollinger" after being aware that the two officers were hostile toward one another and that a confrontation was likely to occur after Officer Johnson's arrest of Phillip Bollinger. While defendants' liability to plaintiff arose from the actions of Officers Johnson and Bollinger, plaintiff sued defendants based on their negligent performance of their supervisory duties.

With respect to defendants Barrett, Hayes, and Camp, their negligence, if any, was insured under Coverage A of the policy. The exclusions applicable to Coverage A of the policy would involve "claims or injury arising out of the willful, intentional or malicious conduct of any Insured." Here plaintiff's allegations against these defendants did not relate to any "willful, intentional or malicious conduct" by them. Here plaintiff alleged that these defendants were negligent in their supervision of Officers Johnson and Bollinger. With respect to the City of Kings Mountain, its negligence, if any, was insured under Coverage B of the policy. The exclusions applicable would apply to claims for "bodily injury" or injury arising from "false arrest, assault or battery, detention, imprisonment, malicious prosecution or abuse of process." Plaintiff's cause of action against the City of Kings Mountain is also...