Beckley Mechanical, Inc. v. Erie Insurance ( 2010 )

  •                               UNPUBLISHED
                      UNITED STATES COURT OF APPEALS
                          FOR THE FOURTH CIRCUIT
                                  No. 09-1549
    BECKLEY   MECHANICAL,    INCORPORATED,      a   West   Virginia
                    Plaintiff - Appellant,
                    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    Affirmed by unpublished per curiam opinion.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    Unpublished opinions are not binding precedent in this circuit.
                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,
           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
    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
           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.”).
    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
    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
                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,
           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.
    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.