340 Ga. App. 534
Ga. Ct. App.2017Background
- Ramie Key, a state inmate, obtained a $300,000 consent judgment in federal court against a former correctional officer for use of excessive force while acting in official capacity.
- The officer was criminally charged (including aggravated battery) and entered an Alford plea with first-offender treatment.
- Key sought indemnification/payment from the Georgia Department of Administrative Services (DOAS) under its general liability agreement; DOAS denied coverage based on a criminal-acts exclusion.
- The policy excluded claims for damages "resulting from any dishonest, fraudulent or criminal act or omission of any Covered Party which forms the basis of a criminal conviction, whether by verdict, plea of guilty or plea of nolo contendere including any criminal conviction for which first-offender treatment is afforded."
- Key sued for declaratory relief; the trial court dismissed for failure to state a claim, finding the exclusion unambiguous and applicable.
- The Court of Appeals affirmed, holding the exclusion covers convictions via Alford pleas and does not violate public policy given the statute’s purpose to protect employees, not compensate victims of criminal conduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the criminal-acts exclusion is ambiguous | Key: exclusion is susceptible to multiple meanings (e.g., may not apply to Alford pleas or might require both criminal act and that the claim itself form basis of conviction) | DOAS: language is plain and covers convictions by plea (including Alford) and applies to conduct forming basis of conviction | Court: exclusion unambiguous; covers Alford pleas and the conduct here that formed basis of the conviction |
| Whether an Alford plea is a conviction for purposes of the exclusion | Key: Alford plea preserves claim of innocence so exclusion shouldn’t apply | DOAS: Alford plea is still a guilty plea/conviction | Court: Alford plea is a guilty plea/conviction; exclusion applies |
| Proper grammatical construction of the exclusion | Key: exclusion should be read to require that the claim for damages itself "forms the basis" of conviction | DOAS: standard rules of construction apply; last antecedent and verb agreement show exclusion targets acts/omissions forming basis of conviction | Court: rejected Key’s reading as grammatically flawed and rendering the clause surplusage; applied plain meaning |
| Whether the exclusion is void as against public policy | Key: compulsory/state-funded coverage indicates intent to protect public (victims); exclusion frustrates public policy | DOAS: statutory scheme aims to protect state employees from personal liability, not to compensate victims of employees’ criminal acts | Court: not against public policy; Legislature is ultimate arbiter and statute supports indemnifying employees only for non-criminal conduct |
Key Cases Cited
- Alford v. North Carolina, 400 U.S. 25 (1970) (explains that a defendant may enter a guilty plea while maintaining innocence; plea may be accepted if knowing and voluntary)
- Ga. Farm Bureau Mut. Ins. Co. v. Smith, 298 Ga. 716 (2016) (ambiguous insurance provisions construed against insurer/drafter)
- Reed v. Auto-Owners Ins. Co., 284 Ga. 286 (2008) (insurance contract interpretation begins with plain text; give words their ordinary meaning)
- Deal v. Coleman, 294 Ga. 170 (2013) (rule of last antecedent in contract construction)
- Emory Univ. v. Porubiansky, 248 Ga. 391 (1981) (courts should declare contracts against public policy only in clear cases)
- R & G Investments & Holdings v. American Family Ins. Co., 337 Ga. App. 588 (2016) (construction that renders a contract provision surplusage should be avoided)