The opinion
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-2233
ALLAN CARL RANTA,
Plaintiff - Appellant,
v.
THE CATHOLIC MUTUAL RELIEF SOCIETY OF AMERICA,
Defendant - Appellee,
and
WAYLAND YODER BROWN,
Defendant.
Appeal from the United States District Court for the District of
South Carolina, at Beaufort. Sol Blatt, Jr., Senior District
Judge. (9:11-cv-00074-SB)
Submitted: May 18, 2012 Decided: July 24, 2012
Before MOTZ, GREGORY, and DUNCAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Lawrence E. Richter, Jr., Aaron E. Edwards, THE RICHTER FIRM,
LLC, Mt. Pleasant, South Carolina, for Appellant. Richard A.
Farrier, Jr., Robert H. Jordan, NELSON MULLINS RILEY &
SCARBOROUGH, LLP, Charleston, South Carolina; David M. Spector,
Dennis G. LaGory, David C. Giles, SCHIFF HARDIN LLP, Chicago,
Illinois, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Allan Carl Ranta brought suit against the Catholic
Mutual Relief Society (“Catholic Mutual”), seeking a declaratory
judgment that the insurance company is required to indemnify
Wayland Yoder Brown, a defrocked priest and convicted pedophile,
for the $100 million tort judgment Ranta obtained against him.
The district court granted Catholic Mutual’s motion for summary
judgment and denied Ranta’s cross motion for summary judgment,
and Ranta now appeals. We have reviewed the record and find no
reversible error. Accordingly, we affirm.
In 2006, Ranta brought suit against Brown, the Holy
See, the Roman Catholic Diocese of Savannah, and Most Rev.
Raymond Lessard and J. Kevin Boland, the Diocese’s former and
current bishops, in South Carolina state court, alleging that
Brown sexually molested, raped, and physically assaulted him as
a minor from 1978 to 1982, resulting in years of psychological
damage with physical manifestations. In 2009, Ranta reached a
“Settlement Agreement and Release” with the Roman Catholic
Diocese of Savannah, Lessard, and Boland, whereby Ranta agreed
to release “any and all” claims against the named Defendants, as
well as the Defendants’ insurers, including Catholic Mutual. In
return, the Defendants agreed to pay Ranta $4.24 million “in
full settlement and discharge of all claims which are, or might
have been, the subject matter of the Complaint.”
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Ranta subsequently filed a motion for summary judgment
against Brown, who was not a party to the Settlement Agreement.
In response, Brown pled his Fifth Amendment right against self-
incrimination. The South Carolina Court of Common Pleas granted
Ranta summary judgment on all causes of action, awarding him $50
million in actual damages and $50 million in punitive damages
based upon “the violent and severe sexual abuse” suffered by
Ranta, the pain and suffering that resulted, and the extensive
and substantial medical care incurred. Ranta v. Roman Catholic
Diocese of Savannah, No. 2006-CO-27-143 (S.C. Ct. Comm. Pl. Jan.
10, 2010).
In December 2010, Ranta brought the instant action
against Catholic Mutual in South Carolina state court, seeking a
declaratory judgment that Catholic Mutual is obligated to
indemnify Brown for the $100 million tort judgment obtained
against him. Catholic Mutual removed the case to federal court,
and both parties filed motions for summary judgment. The
district court found that the Settlement Agreement did not
release Catholic Mutual with respect to Ranta’s claims against
Brown. However, the court ruled that summary judgment in favor
of Catholic Mutual was nonetheless warranted, as Brown’s
intentional acts of sexual molestation did not constitute an
“occurrence” under the insurance policy at issue. The district
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court denied Ranta’s subsequent motion to alter or amend the
court’s judgment, and Ranta timely appealed.
We review the district court’s grant of summary
judgment de novo. Jennings v. Univ. of N.C., 482 F.3d 686, 694
(4th Cir. 2007) (en banc). Summary judgment shall be granted
“if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). “At the summary judgment
stage, facts must be viewed in the light most favorable to the
nonmoving party only if there is a genuine dispute as to those
facts.” Scott v. Harris, 550 U.S. 372, 380 (2007) (internal
quotation marks and citation omitted). “Where the record taken
as a whole could not lead a rational trier of fact to find for
the nonmoving party, there is no genuine issue for trial.” Id.
(internal quotation marks and citation omitted).
Under South Carolina choice of law rules, ∗ an insurance
policy is governed by the law of the state in which the policy
was issued. Unisun Ins. Co. v. Hertz Rental Corp., 436 S.E.2d
549, 551-52 (S.C. Ct. App. 1993). Brown is a Georgia resident
and the policy was issued in Georgia; therefore, Georgia law
governs the interpretation of the insurance policy. Pursuant to
∗
As the district court sits in South Carolina, South
Carolina choice of law rules govern this diversity case. Klaxon
Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).
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Georgia law, to establish a prima facie case on a claim under an
insurance policy, the insured must show that the occurrence was
within the insured risk. Perry v. State Farm Fire & Cas. Co.,
676 S.E.2d 376, 378 (Ga. Ct. App. 2008); Allstate Ins. Co. v.
Grayes, 454 S.E.2d 616, 618 (Ga. Ct. App. 1995).
The policy at issue provides coverage for personal
injuries caused by an “occurrence,” which is defined as “an
accident, including injurious exposure to conditions, which
results, during the certificate period, in personal injury . . .
neither expected nor intended from the standpoint of the”
insured party. Although the policy does not define the term
“accident,” Georgia caselaw defines an accident as “an event
which takes place without one’s foresight or expectation or
design.” Perry, 676 S.E.2d at 378 (citing Crook v. Ga. Farm
Bureau Mut. Ins. Co., 428 S.E.2d 802, 803 (Ga. Ct. App. 1993)).
On appeal, Ranta asserts that the district court erred
in finding that Brown’s acts of sexual abuse did not constitute
an “occurrence.” According to Ranta, Brown knew or should have
known he was a danger to children, yet failed to protect Ranta
from him, thereby breaching his fiduciary duties as a priest.
Therefore, Ranta contends, Brown’s conduct constitutes
negligence, which triggers coverage under Catholic Mutual’s
insurance policy.
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However, the district court properly found that
Ranta’s attempt to recharacterize Brown’s egregious acts of
child rape and sexual molestation as negligence does not render
Brown’s conduct accidental. Numerous Georgia courts have denied
insurance coverage for intentional acts of sexual abuse,
regardless of attempts to recast acts of child molestation in
terms of negligence. See Roe v. State Farm Fire & Cas. Co., 376
S.E.2d 876, 877 (Ga. 1989) (rejecting argument that insurance
coverage was warranted because insured perpetrator sexually
molested child due to obsessive compulsion, without intent to
injure child, as “intentional child molestation carries with it
a presumption of intent to inflict injury”); Harden v. State
Farm Fire & Cas. Co., 605 S.E.2d 37, 38 (Ga. Ct. App. 2004)
(finding that homeowner’s insurance company had no duty to
indemnify insured who sexually molested a minor child, as the
insured “engaged in intentional (not accidental) sexual abuse of
the child, causing physical and mental damage to the child which
he could only have expected and intended”).
Indeed, overwhelming precedent establishes that acts
of child molestation are, as a matter of law, considered to be
intentional and therefore outside the scope of an “occurrence”
for insurance coverage purposes. See Mfr. & Merch. Mut. Ins.
Co. v. Harvey, 498 S.E.2d 222, 226 (S.C. Ct. App. 1998) (listing
decisions from forty-one states finding that acts of child
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sexual molestation carry presumption of intent to inflict
injury). Although Ranta alleges that Brown acted negligently by
failing to protect Ranta against him, the allegations of sexual
misconduct involve intentional, willful, and deliberate acts.
Moreover, because Brown’s acts of sexual abuse carry the
inferred intent to harm Ranta, the acts alleged against Brown
are not “occurrences” and, therefore, are beyond the scope of
Catholic Mutual’s insurance coverage.
Ranta next asserts that the district court erroneously
awarded Catholic Mutual summary judgment because Catholic Mutual
failed to defend Brown in the underlying South Carolina
litigation, thereby waiving its coverage defense. Because
Catholic Mutual elected not to defend Brown, Ranta advances,
Catholic Mutual is estopped from challenging the state court’s
judgment that Brown’s negligence was a proximate cause of
Ranta’s injuries.
The district court properly rejected Ranta’s argument,
as the elements of collateral estoppel are not present. Under
South Carolina law, collateral estoppel precludes only “a party
to the prior action or one in privity with a party to the prior
action” from relitigating an issue previously litigated. Ex
parte Allstate Ins. Co., 528 S.E.2d 679, 681 (S.C. Ct. App.
2000). The term “privy” means “one so identified in interest
with another that he represents the same legal right.” Id.
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Accordingly, when an insurer elects not to defend a tort suit on
the ground that the insured’s tortious conduct was outside the
scope of the insurance policy, the insured and the insurer do
not share an identity of interest regarding the underlying
action and, therefore, are not in privity. See State Farm Fire
& Cas. Co. v. Garrity, 785 F.2d 1225, 1227 (4th Cir. 1986)
(“When the insured is sued for negligence and the insurance
company believes the injury was intentional, [ ] the interests
of the insurer and the insured diverge.”).
Moreover, an insurance company “is neither obligated
to defend nor bound by the findings of the court if the claim
against the insured is not covered by the policy.” Farm Bureau
Mut. Auto. Ins. Co. v. Hammer, 177 F.2d 793, 799 (4th Cir.
1949). The district court properly found that the allegations
of Ranta’s complaint established that there was no duty to
defend. Accordingly, the South Carolina tort judgment does not
bar Catholic Mutual from asserting that Brown’s conduct was
intentional and, therefore, outside the scope of insurance
coverage.
Based on the foregoing, we affirm the judgment of the
district court. We dispense with oral argument because the
facts and legal contentions are adequately presented in the
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materials before the court and argument would not aid the
decisional process.
AFFIRMED
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