Hartford Casualty Insurance v. Davis & Gelshenen, LLP

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 19-1578
HARTFORD CASUALTY INSURANCE COMPANY,
Plaintiff - Appellee,
v.
DAVIS & GELSHENEN, LLP; JOHN J. GELSHENEN, JR.,
Defendants - Appellants.
Appeal from the United States District Court for the Western District of North Carolina, at
Charlotte. Max O. Cogburn, Jr., District Judge. (3:17-cv-00182-MOC-DSC)
Submitted: February 13, 2020 Decided: March 10, 2020
Before WILKINSON, KEENAN, and HARRIS, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Richard L. Pinto, PINTO COATES KYRE & BOWERS, PLLC, Greensboro, North
Carolina, for Appellants. Christopher C. Frost, John A. Little, Jr., MAYNARD, COOPER
& GALE, P.C., Birmingham, Alabama, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Davis & Gelshenen, LLP, and John J. Gelshenen, Jr., (collectively, “Gelshenen
Law”) appeal the district court’s order granting Hartford Casualty Insurance Company’s
(“Hartford”) Fed. R. Civ. P. 12(c) motion for judgment on the pleadings. We affirm.
In 2016, Gelshenen Law was named as a defendant, among others, in a single-count
putative class action (“underlying action”). The plaintiffs—drivers who had been involved
in automobile accidents in North Carolina—alleged that the defendants violated the
Driver’s Privacy Protection Act of 1994 (“DPPA”), 18 U.S.C. §§ 2721-2725 (2018), by
obtaining, without consent, the plaintiffs’ names and addresses from official accident
reports submitted to the Department of Motor Vehicles and using that information to mail
advertisements for legal services to the plaintiffs.
Hartford, who had issued a series of business-liability policies to Gelshenen Law
between June 2011 and June 2017, filed a complaint, seeking a declaratory judgment that,
under those policies, it has no duty to defend or indemnify Gelshenen Law in the underlying
action. See 28 U.S.C. §§ 1332(a)(1), 2201 (2018). Hartford moved for judgment on the
pleadings, arguing that the underlying action unambiguously falls within two exclusions to
the policies. The first excludes coverage for personal and advertising injury arising out of
the violation of an individual’s right to privacy created by any state or federal act, unless
the insured would have been liable even in the absence of such state or federal act (“the
privacy exclusion”). The second excludes coverage for personal and advertising injury
arising directly or indirectly from a statute, ordinance, or regulation that prohibits or limits
sending, transmitting, communicating, or distributing material or information (“the
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communications exclusion”). The district court concluded that the underlying action falls
squarely within both exclusions and, therefore, granted Hartford’s motion for judgment on
the pleadings and dismissed the action.
“We review de novo the district court’s ruling on a motion for judgment on the
pleadings pursuant to Federal Rule of Civil Procedure 12(c).” Pa. Nat’l Mut. Cas. Ins.
Co. v. Beach Mart, Inc., 932 F.3d 268, 274 (4th Cir. 2019) (alteration and internal quotation
marks omitted). In so doing, “we must view the facts presented in the pleadings and the
inferences to be drawn therefrom in the light most favorable to the nonmoving party.” Id.(internal quotation marks omitted). We also consider documents attached to the complaint
or motion “so long as they are integral to the complaint and authentic.” Fusaro v. Cogan,
930 F.3d 241, 248 (4th Cir. 2019) (internal quotation marks omitted). “A motion for
judgment on the pleadings is properly granted if it appears certain that the [nonmoving
party] cannot prove any set of facts in support of its claim entitling it to relief.” Pulte Home
Corp. v. Montgomery Cty., 909 F.3d 685, 691 (4th Cir. 2018) (alterations and internal
quotation marks omitted).
“Pursuant to North Carolina law,” which the parties do not dispute applies here, “the
interpretation of an insurance policy is a question of law” for the court. State Auto Prop. &
Cas. Ins. Co. v. Travelers Indem. Co. of Am., 343 F.3d 249, 254 (4th Cir. 2003). An
insurance policy is a contract, and, “[a]s with all contracts, the object of construing an
insurance policy is to arrive at the insurance coverage intended by the parties when the
policy was issued.” Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield, L.L.C., 692 S.E.2d
605, 612 (N.C. 2010) (internal quotation marks omitted). “When the policy language is
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clear and unambiguous, a court is required to enforce the policy as written.” Cont’l Cas.
Co. v. Amerisure Ins. Co., 886 F.3d 366, 371 (4th Cir. 2018). North Carolina courts resolve
“any ambiguity in the words of an insurance policy against the insurance company,”
“construe[] liberally insurance policy provisions that extend coverage so as to provide
coverage, whenever possible by reasonable construction,” and “strictly construe against an
insurance company those provisions excluding coverage under an insurance policy.”
Harleysville Mut. Ins. Co., 692 S.E. 2d at 612 (internal quotation marks omitted).
“An insurer’s duty to defend is ordinarily measured by the facts as alleged in the
pleadings” in the underlying action, and “its duty to pay is measured by the facts ultimately
determined at trial.” Waste Mgmt. of Carolinas, Inc. v. Peerless Ins. Co., 340 S.E.2d 374,
377 (N.C. 1986). Thus, “[w]hen 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.” Id. But, “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 to defend.” Id. “[T]o determine whether the events as
alleged are covered or excluded,” courts “apply the comparison test, reading the policies
and the complaint side-by-side.” Harleysville Mut. Ins. Co., 692 S.E.2d at 610 (internal
quotation marks omitted).
“[T]he insured has the burden of bringing itself within the insuring language of the
policy.” Kubit v. MAG Mut. Ins. Co., 708 S.E.2d 138, 147 (N.C. Ct. App. 2011) (alteration
and internal quotation marks omitted). If the insured meets this burden, the insurer must
“prove that a policy exclusion excepts the particular injury from coverage.” Id. (internal
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quotation marks omitted). If the insurer is successful, the burden shifts back to the insured
to “prov[e] that an exception to the exclusion exists and applies to restore coverage.” Home
Indem. Co. v. Hoechst Celanese Corp., 494 S.E.2d 774, 783 (N.C. Ct. App. 1998).
We previously affirmed a district court’s order concluding that Hartford had no duty
to defend or indemnify one of Gelshenen Law’s codefendants in the underlying action
because the DPPA claim unambiguously falls within an identical privacy exclusion. See
Hartford Cas. Ins. Co. v. Ted A. Greve & Assocs., PA, 742 F. App’x 738 (4th Cir. 2018
(No. 17-2407) (“Greve”). Gelshenen Law does not attempt to distinguish that case, and
we conclude that the same reasoning applies here. Thus, because the privacy exclusion
precludes coverage, Hartford has no duty to defend or indemnify Gelshenen Law under the
policies at issue. * We also find no merit to Gelshenen Law’s argument that Hartford’s
motion for judgment on the pleadings was premature.
Accordingly, we affirm the district court’s judgment. We dispense with oral
argument because the facts and legal contentions are adequately presented in the materials
before this court and argument would not aid the decisional process.
AFFIRMED
*
Because the privacy exclusion applies, we need not consider whether the
communications exclusion also precludes coverage.
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