Georgia Department of Administrative Services v. McCoy
340 Ga. App. 877
Ga. Ct. App.2017Background
- McCoy sued two DFCS employees (including Nicole Allen) alleging RICO, malicious prosecution, and intentional infliction of emotional distress; default judgment awarded large treble damages and punitive damages against Allen.
- McCoy did not give ante litem notice to the State or name DFCS/the State in the underlying suit; she later sought payment under the State Employee Liability Trust Fund General Liability Agreement (GLA) administered by DOAS.
- DOAS refused to pay; McCoy sued DOAS for breach of the GLA (failure to defend/indemnify) and obtained summary judgment in the trial court for policy limits.
- On appeal DOAS argued the GLA unambiguously excludes coverage for occurrences committed outside the course and scope of employment and therefore it owes no defense or indemnity for Allen’s liability.
- The Court of Appeals majority reversed, holding the GLA unambiguously excludes coverage for out-of-scope acts and remanded with direction to enter summary judgment for DOAS; a dissent argued the GLA is ambiguous and should be construed for coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the GLA is ambiguous about coverage for acts outside the scope of employment | McCoy: GLA language (e.g., inclusion of malicious prosecution in "personal injury") creates ambiguity that favors coverage | DOAS: GLA plainly states coverage only for occurrences "while acting in the course and scope" and excludes out-of-scope occurrences | Held: GLA unambiguous — excludes coverage for acts outside the scope of employment |
| Whether the default judgment against Allen can impose State/GLA liability for within-scope acts | McCoy: underlying suit alleged acts in course and scope of employment (prior appellate statements) | DOAS: no ante litem notice; default judgment could only establish liability for out-of-scope acts | Held: Because no ante litem notice, underlying judgment could only concern out-of-scope conduct; it did not establish GTCA-covered, within-scope liability |
| Whether inclusion of malicious prosecution in "personal injury" makes coverage illusory or ambiguous | McCoy: malicious prosecution is listed as covered, but GTCA bars malicious prosecution within scope, creating a conflict that favors insured | DOAS: that argument conflates GTCA limitations (within-scope) with GLA exclusions (outside-scope); it does not create ambiguity about out-of-scope exclusion | Held: Even if GTCA-related questions exist for within-scope claims, they do not render the GLA ambiguous as to out-of-scope exclusion |
| Whether DOAS breached duty to defend or indemnify under the GLA for Allen’s liability | McCoy: GLA must respond to "covered allegations" and defend/pay when suit "is not covered by the GTCA" | DOAS: Allen’s liability arose from out-of-scope acts which the GLA expressly excludes, so no defense or indemnity obligation | Held: DOAS did not breach; summary judgment for DOAS directed (trial court’s judgment for McCoy reversed) |
Key Cases Cited
- McCoy v. Ga. Dept. of Admin. Svcs., 326 Ga. App. 853 (Court of Appeals decision earlier in same litigation addressing standing) (prior appellate ruling on standing/coverage posture)
- Riddle v. Ashe, 269 Ga. 65 (discussing GTCA exposure of State for within-scope torts)
- Ridley v. Johns, 274 Ga. 241 (holding GTCA extends immunity for officials acting within scope, without exception for malice)
- King-Morrow v. American Family Ins. Co., 334 Ga. App. 802 (principle that court must determine whether policy language is ambiguous)
- Home Builders Assn. of Savannah v. Chatham County, 276 Ga. 243 (standard of de novo review on summary judgment)