TOWN OF DUNCAN v. BOARD
3/3/1997
On appeal is an order finding Respondent State Budget and Control Board ("Board") does not have a duty to defend or indemnify Appellant Town of Duncan ("Town") against two lawsuits. We reverse.
FACTS
In January of 1993 two complaints were commenced against Town. Both alleged the plaintiffs therein were fired in retaliation for reporting various acts of misconduct by Town's mayor and for being involved in the mayor's arrest for public disorderly conduct and resisting arrest. Plaintiffs alleged causes of action for (1) violation of the state "Whistleblower Act," (2) intentional infliction of emotional distress, and (3) tortious conduct resulting in a chilling effect on equal enforcement of state laws.
Town was insured under a tort liability policy issued by Board. However, upon notification of the two suits, Board refused to defend or indemnify on the ground that the causes of action alleged were not covered under the insurance policy. Town brought a declaratory judgment action against Board to have the rights and obligations of the parties under the insurance policy determined. The trial judge found the policy did not provide coverage for any of the causes of action
ISSUE
Does the insurance policy provide coverage for the plaintiffs' lawsuit?
DISCUSSION
Board issued Town a general "Tort Liability Insurance Policy," the pertinent provisions of which are quoted below:
I.
COVERAGE
The Fund will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
A. Personal injury . . . to which this applies caused
by an occurrence
The Fund shall have the right and duty to defend any
suit against the insured seeking damages on account
of such personal injury . . . even if any of the
allegations of the suit are groundless, false, or
fraudulent, and may make such investigation and
settlement of any claim or suit as it deems
expedient . . . .
III.
DEFINITIONS
"Personal Injury" means
(2) injury arising out of one or more of the following
offenses committed during the policy period:
(a) false arrest, detention, imprisonment, malicious
prosecution, or humiliation;
(g) violation of the following Amendments to the
Constitution of the United States:
First Amendment
The primary cause of action Plaintiffs alleged is violation of the Whistleblower Act. This statute generally prohibits any public body from retaliating against an employee who reports wrongdoing. The trial judge found that because the Whistleblower Act is not within the purview of the Tort Claims Act, the policy did not provide coverage. In other words, the judge found the policy only covered claims for which immunity was waived under the Tort Claims Act. We disagree.
Prior to 1985, governmental entities were protected from lawsuits alleging tortious conduct by its employees by the doctrine of sovereign immunity. However, in that year we abolished total sovereign immunity in McCall v. Batson, 285 S.C. 243, 329 S.E.2d 741 (1985). In response to McCall, the legislature passed the Tort Claims Act, which waived sovereign immunity under certain circumstances. This Act mandated that all political subdivisions procure tort liability insurance to cover risks for which immunity was waived. S.C. Code Ann. ยง 15-78-140 (b) (Supp. 1995). The Act made it the "duty of the [Board] to cover risks for which immunity has been waived under the provisions of this chapter b
Page 1 2 3 South Carolina Personal Injury Attorneys