Bullard v. Wake County
221 N.C. App. 522
| N.C. Ct. App. | 2012Background
- Bullards bought 5.28 acres in Raleigh in 1991 to build a home; Tall House built the residence with Wake County inspecting the project (foundation, framing, plumbing, electrical, insulation).
- Certificate of occupancy issued December 15, 2004 stating all required inspections complete; inspections noted and corrected violations when found.
- Arbitration against Tall House awarded Bullards $2,626,452.45 on April 9, 2009 for repairs and damages; Tall House later filed for bankruptcy.
- Bullards sued Wake County on April 7, 2009 for negligent inspection and negligent misrepresentation; County asserted sovereign immunity and statute of limitations as defenses.
- Trial court granted summary judgment on sovereign immunity (and statute of limitations); appeals court affirmed, holding no waiver of immunity due to insurance policy terms and self-insured retention.
- Policy history: 2002-2004 Endorsements barred waiver of immunity; 2004-2005 policy lacked endorsement but retained limit mechanics still prevented waiver; County maintained a $500,000 self-insured retention (RI) with waiver only for voluntary settlements pre-suit, which did not occur.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether County waived sovereign immunity under § 153A-435 by purchasing insurance | Bullards assert waiver via insurance coverage, including excess policy. | County argues endorsement exclusions and retention prevent waiver; no coverage for the claims. | No waiver; policy language excludes waiver. |
| Whether the $500,000 self-insured retention precludes waiver for any portion of the Bullards' claim | Bullards contend some excess coverage above $500,000 may waive immunity. | Waiver limited to voluntary settlements pre-suit; no exhaustion of retained limit occurs here. | No waiver for the first $500,000; no complete expenditure of retained limit. |
| Whether policy terms/precedent require exhaustion of retained limit to trigger waiver for claims above retention | Claims above $500,000 should be covered if policy provides excess coverage. | Arrington and Magana require exhaustion of retained limit; here not exhausted. | Waiver not triggered; sovereign immunity remains intact for Bullards' claims. |
Key Cases Cited
- Patrick v. Wake Cnty. Dep't of Human Servs., 188 N.C. App. 592, 655 S.E.2d 920 (2008) (insurance not a waiver unless policy covers the claim and authorized by statute)
- Earley v. Haywood Cnty. Dep't of Soc. Servs., 204 N.C. App. 338, 694 S.E.2d 405 (2010) (exclusionary policy language defeats waiver of immunity)
- Magana v. Charlotte-Mecklenburg Bd. of Educ., 183 N.C. App. 146, 645 S.E.2d 91 (2007) (coverage contingent on first dollars; no waiver if retained limit not exhausted)
- Arrington v. Martinez, 215 N.C. App. 252, 716 S.E.2d 410 (2011) (similar to Magana; exhaustion rule for self-insured retention applies)
- Cunningham v. Riley, 169 N.C. App. 600, 611 S.E.2d 423 (2005) (waiver limited to retained self-insured amount)
- Doe v. Jenkins, 144 N.C. App. 131, 547 S.E.2d 124 (2001) (insurance does not indemnify where coverage excludes the claim)
- Cowell v. Gaston Cnty., 190 N.C. App. 743, 660 S.E.2d 915 (2008) (policy ambiguity affects waiver determination)
- Dawes v. Nash Cnty., 357 N.C. 442, 584 S.E.2d 760 (2003) (sovereign immunity doctrine and waiver mechanics)