Please ensure Javascript is enabled for purposes of website accessibility
Home / Opinion Digests / Employment Law / 4th Cir.: Each wrongly fired officer was a distinct insurance claim

4th Cir.: Each wrongly fired officer was a distinct insurance claim

The district court erred in finding that three police officers, fired in retaliation for their joint action, represented a single claim for municipal insurance purposes. Thus, the per-claim policy limit applied to each officer individually, rather than the trio as a whole.


The Plaintiffs, long-time employees of the Mocksville Police Department, developed concerns about the personal conduct and management of a new police chief, Robert Cook. They initially voiced their concerns to Town Manager Christine Bralley, but saw no improvement.

Eventually, the Plaintiffs anonymously called the North Carolina governor’s office and reported what they viewed as corruption and misconduct within their Department. The governor’s office relayed these concerns for state investigation.

After identifying the Plaintiffs as the anonymous callers, Cook and Bralley terminated their employment. The Plaintiffs’ individual termination letters alleged myriad misdeeds justifying termination, including insubordination, attitude, and conduct unbecoming an officer. However, the Plaintiffs’ service records had, until that point, been essentially unblemished.

The Plaintiffs sued the Town, Cook, and Bralley for First Amendment retaliation and wrongful discharge under state law. A jury found in the Plaintiffs’ favor on their First Amendment claims against Cook and Bralley and on their state wrongful-discharge claims against the Town.

Intervening in the proceedings, the Town’s insurer argued that its policy’s per-claim limit of $1 million limited Plaintiffs’ aggregate recovery to $1 million. The district court agreed, finding that, under the policy, all three Plaintiffs’ claims together constituted one single claim under the policy. Thus, the district court held the Defendants jointly and severally liable to the Plaintiffs for a total of $1,990,544 in compensatory damages and front pay, but ordered that the Town’s maximum liability was not to exceed $1 million. The Plaintiffs appealed.

Scope of immunity

The critical inquiry is the extent to which the Town waived its governmental immunity by virtue of purchasing liability insurance covering tortious acts. In this case, the district court erred in concluding that (1) each Plaintiff’s claim arose out of the same wrongful act, and (2) the meaning of “interrelated” was unambiguous and applied to the Plaintiffs’ claims.

First, Plaintiffs’ claims are neither based on nor arise out of the “same” “employment wrongful act.” In its ordinary usage, “same” means “identical or equal; resembling in every relevant respect.” In addition, “employment wrongful act” under the policy includes an “action involving termination of employment.”

Applying these two definitions, there were three wrongful acts that served as the bases of Plaintiffs’ lawsuit: the Town’s termination of Hunter; its termination of Medlin; and its termination of Donathan. The Town terminated each Plaintiff by separate letter and, at least ostensibly, for different written reasons. The jury’s finding that the true reasons for their terminations were identical does not undermine the conclusion that the Town acted thrice — not once. Indeed, even the jury instructions listed each Plaintiff’s termination separately.

Further, the meaning of the term “interrelated” is ambiguous for several reasons. First, the policy does not define the term even though it has become commonplace for insurance policies to do so. Because the insurer chose to define the term “related” with the definition commonly reserved for “interrelated” while leaving “interrelated” undefined, the court concludes that the meaning of “interrelated” is uncertain and therefore ambiguous as to whether it encompasses claims by multiple claimants based on multiple wrongs.

Because the scope of the term “interrelated” is not discernible, the ambiguity is resolved in the Plaintiffs’ favor (as the beneficiaries). Thus, the Town waived its governmental immunity for up to $1 million per Plaintiff for damages resulting from the three wrongful terminations, subject to the policy’s $3 million aggregate limit.

First Amendment

The district court also erred in granting summary judgment in the Town’s favor on the Plaintiff’s First Amendment claims.

Bralley’s actions may fairly be imputed to the Town, as she acted with final policymaking authority in firing the Plaintiffs. When determining whether a local official possesses final policymaking authority, courts must look to legal authorities including state and local positive law. The relevant local positive law in this case makes clear that the Town delegated to Bralley final and unconstrained policymaking authority with regard to the challenged actions at issue.

Bralley wielded such authority — free of any constraints on her discretion — when she terminated the Plaintiffs’ employment in violation of the First Amendment. The Town has long since repealed all personnel policies that may have constrained her authority, while declining to promulgate new ones. It maintains no formal review process for evaluating her termination decisions. The circumstances surrounding Bralley’s decision have all the hallmarks of a final policymaker wielding her authority.

Because Bralley’s actions by themselves are sufficient to subject the Town to liability under § 1983, summary judgment is inappropriate.

Affirmed in part, reversed in part, and remanded.


(Niemeyer, J.) I am pleased to concur in the majority’s opinion regarding the Town of Mocksville’s liability for the nearly $2 million judgment entered pursuant to the jury’s verdict, concluding that the Town conferred policy-making authority on the Town Manager that covered the personnel actions taken by her and the Chief of Police. However, I cannot agree that the Town’s insurance policy is ambiguous. Therefore, I would affirm the district court’s ruling limiting coverage to $1 million.

In contriving ambiguity for the policy, the majority fails to take heed of North Carolina law. The North Carolina Supreme Court has explained that ambiguity does not exist unless the language of the policy is fairly and reasonably susceptible to either of the constructions for which the parties contend, and courts may not remake the contract and impose liability on the company which it did not assume and for which the policyholder did not pay.

It could not be clearer that the three officers’ claims are to be treated under the policy as a single claim, for which the policy limits coverage to $1 million, less the $5,000 deductible. For these reasons, I would affirm the district court’s construction of the policy.

Hunter v. Town of Mocksville, N.C., Case No. 17-1374, July 26, 2018. 4th Cir. (Wynn), from MDNC at Greensboro (Schroeder). Reynolds Michael Elliot & Robert Mauldin Elliott for Appellants; Cathryn MacDonald Little & Patrick Houghton Flanagan for Appellees. VLW No. 018-2-157, 49 pp.

VLW 018-2-157