Law360 Interviews Tae Andrews on NC Supreme Court Willful Violation Coverage Dispute
A recusal from the North Carolina Supreme Court resulted in a deadlock among the remaining justices, leaving undisturbed an appeals court’s finding that allegations against law firm Lanier Law Group PA triggered a “willful violation of a penal statute” exclusion in the firm’s excess policy with North Carolina Farm Bureau Mutual Insurance Co. Inc. In the intermediate appellate ruling, the panel found that the underlying allegation that Lanier Law Group “knowingly” violated the Driver’s Privacy Protection Act was the same as an allegation of a “willful” violation of the DPPA.
In an interview with Law360, Counsel Tae Andews explained that there are ample grounds to criticize the reasoning behind the intermediate appellate ruling. “[T]he DPPA statute itself distinguishes between ‘knowing’ and ‘willful’ conduct,” he said. “Specifically, DPPA allows a court to award actual damages against a person who ‘knowingly’ obtains, discloses, or uses personal information from a motor vehicle record. For 'willful' disregard of the law, the court may award punitive damages.”
Because the underlying plaintiffs only sought actual damages and did not make a claim for punitive damages, Andrews asserted that the intermediate appellate decision ignored the plain meaning of DPPA and the actual damages sought.
Following the high court’s 3-3 split, Andrews noted that it “shows just how close the case was and also that reasonable minds can differ regarding the interpretation of the exclusion — which indicates that it's ambiguous at best.”
“Insurance policies are supposed to be interpreted from the perspective of a reasonable person, untrained in the law,” he added. “If the decision resulted in a deadlock between six of the best legal minds in North Carolina (if not the country), clearly, the exclusion is susceptible of multiple reasonable interpretations, which means it should have been construed in favor of the policyholder.” The silver lining for policyholders, he said, is that the decision is not the final word on the subject.
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