Beckley Mechanical, Inc. v. Erie Insurance Property & Casualty Co. , 374 F. App'x 381 ( 2010 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-1549
BECKLEY MECHANICAL, INCORPORATED, a West Virginia
corporation,
Plaintiff - Appellant,
v.
ERIE INSURANCE PROPERTY & CASUALTY COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the Southern
District of West Virginia, at Beckley. Thomas E. Johnston,
District Judge. (5:07-cv-00652)
Submitted: March 19, 2010 Decided: April 13, 2010
Before WILKINSON, DUNCAN, and AGEE, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Frederick F. Holroyd, II, HOLROYD & YOST, Charleston, West
Virginia, for Appellant. Matthew J. Perry, LAMP, O’DELL,
BARTRAM, LEVY & TRAUTWEIN, P.L.L.C., Huntington, West Virginia,
for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
This is an appeal from the district court’s adverse
grant of summary judgment and dismissal of an action seeking
declaratory relief filed by Beckley Mechanical, Inc. (“Beckley”)
against its insurer, Erie Insurance Property & Casualty Co.
(“Erie”). Beckley contends that the district court erred in its
determination that a series of acts of embezzlement by an
employee constituted “one occurrence” under the applicable
insurance policy. We affirm the district court’s grant of
summary judgment.
The action arose out of a claim for proceeds from an
insurance policy providing coverage for loss caused by employee
dishonesty issued by Erie to Beckley, Policy No. Q44-6850015
(“the Policy”). Over a period of time, Suzanne Snyder, a
bookkeeper employed by Beckley, falsified records to conceal
approximately 293 checks she drafted to herself, embezzling
$424,024. Snyder ultimately was charged with seven counts each
of felony embezzlement and of falsifying records.
The Policy was in effect during the time of the
embezzlement, and it provided for insurance coverage for
employee dishonesty as follows:
11. Employee Dishonesty. We will pay for “loss” of
“money”, “securities”, and business personal property
and personal property of others . . . up to $10,000
per occurrence resulting from dishonest acts committed
by any of your “employees” . . . . All loss caused by,
2
or involving, one or more “employees”, whether the
result of a single act or a series of acts, is
considered one occurrence.
Erie maintained that Snyder’s embezzlement constituted “one
occurrence” and, consequently, paid out $10,000 on Beckley’s
claim under the Policy. Beckley filed suit, seeking a
declaratory judgment and alleging that the multiple acts of
embezzlement by Snyder constituted separate acts and separate
occurrences, such that Erie was liable for payment for each
unlawful draft. In granting Erie’s motion for summary judgment,
the district court specifically determined that, according to
the plain and unambiguous language of the Policy, recovery was
limited on claims arising from one employee’s misconduct to the
stated policy limit, and that the series of fraudulent checks
drafted by Snyder constituted one occurrence for loss purposes.
This court reviews the district court’s grant of
summary judgment de novo. Hill v. Lockheed Martin Logistics
Mgmt., Inc., 354 F.3d 277, 283 (4th Cir. 2004). An award of
summary judgment is only appropriate when the summary judgment
record shows “that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(c); see also Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986). In evaluating a summary
judgment issue, the evidence of record must be viewed in the
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light most favorable to the nonmoving party. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
A mere scintilla of proof, however, will not bar a
summary judgment award; the question is “not whether there is
literally no evidence, but whether there is any upon which a
jury could properly proceed to find a verdict for the party
producing it.” Id. at 251 (internal quotation marks omitted).
Where “the nonmoving party has failed to make a sufficient
showing on an essential element of [its] case, with respect to
which [it] has the burden of proof,” the moving party is
entitled to summary judgment. Celotex Corp., 477 U.S. at 323
(citations omitted).
Under West Virginia law, 1 the court properly looks to
the specific wording of the policy to determine whether the
policy provides coverage for a particular claim of loss. Keefer
v. Ferrell, 655 S.E.2d 94, 99 (W. Va. 2007). “Where provisions
in an insurance policy are plain and unambiguous and where such
provisions are not contrary to a statute, regulation, or public
1
West Virginia substantive law applies to this declaratory
judgment action, which was based on diversity of citizenship.
See Erie R.R. v. Thompkins, 304 U.S. 64 (1938); First Fin. Ins.
Co. v. Crossroads Lounge, Inc., 140 F. Supp. 2d 686, 694 (S.D.
W. Va. 2001) (“Absent indication to the contrary, West Virginia
law . . . govern[s] interpretation of the insurance policy at
issue in [a] declaratory judgment action, where jurisdiction is
based on diversity of citizenship.”).
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policy, the provisions will be applied and not construed.” Id.
(citations omitted).
As a preliminary matter, and contrary to Beckley’s
contention, review of the express language in the Policy at
issue reveals no ambiguity, nor is it confusing or deceptive.
The Policy clearly defines an occurrence as including a “series
of acts” for purposes of the employee dishonesty provision,
which definition is located on the same page and in the same
size font as the language providing $10,000 “per occurrence.”
That Beckley does not agree to the construction of the contract
does not render it ambiguous. See Pilling v. Nationwide Mut.
Fire Ins. Co., 500 S.E.2d 870, 872 (W. Va. 1997).
Beckley claimed below, as it does on appeal, that each
unlawful draft Snyder made should be considered a separate
occurrence. Citing to Copier Word Processing Supply, Inc. v.
WesBanco Bank, Inc., 640 S.E.2d 102 (W. Va. 2006), in which the
Supreme Court of Appeals of West Virginia found that the
conversion of multiple separate negotiable instruments did not
amount to a continuing tort, Beckley asserts that the logic
similarly applies in the present context such that multiple
conversions cannot be considered a single occurrence under a
policy of insurance. However, the district court properly noted
the distinction under West Virginia law between the continuing
tort theory for purposes of a statute of limitations analysis
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and a “series of acts” under an insurance policy for purposes of
coverage. See Auber v. Jellen, 469 S.E.2d 104, 108 (W. Va.
1996) (series of malpractice acts considered a series of
separate acts such that they do not constitute a continuing tort
for purposes of tolling applicable statute of limitations, yet
still constitute a single occurrence under the language of
insurance policy and for purposes of determining insurance
coverage).
Nor is there any language in the Policy that ties the
interpretation of “an occurrence” to whether such series of acts
would constitute a continuing tort. As such, the Policy itself
does not trigger an analysis under the continuing tort theory.
Moreover, and most importantly, as the district court properly
held, given that the language of the Policy is clear and
unambiguous, there is no reason to look to the theory of
continuing tort in order to interpret the Policy language. 2
Accordingly, we affirm the district court’s grant of
summary judgment in favor of Erie, and its determination that,
2
We also find to be without merit Beckley’s argument that
the fact that Snyder was charged with, pled guilty to, and was
convicted and sentenced upon multiple counts of embezzlement
establishes its position that Snyder’s series of acts should be
considered to be multiple occurrences under the Policy. The
district court was correct in its determination that Snyder’s
criminal history is not relevant to its interpretation of the
plain language of the Policy.
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by payment of $10,000 to Beckley, Erie satisfied its obligation
under the Policy relative to this action. We dispense with oral
argument because the facts and legal contentions are adequately
presented in the materials before the court and argument would
not aid the decisional process.
AFFIRMED
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