Court Opinion

ID: 1618
Source: CourtListenerOpinion
Date Created: 2010-04-14 00:15:07+00
Date Added: 2024-06-11T16:42:00.144868
License: Public Domain

UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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,

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       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

                                            3
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.”).

                                         4
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

                                                  5
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.

                                           6
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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