The Travelers Indemnity Company et al v. Forrest County et al
Filing
370
ORDER granting Counter-Defendant Steadfast Insurance Company's 223 Motion for Judgment on the Pleadings; granting Counter-Defendants Swiss RE International and Gemini Insurance Company's 134 Motion for Judgment on the Pleadings; and granting Counter-Plaintiffs Mitchell, Smith, Strong, Dixon, and Ruffin's 197 Motion for Leave to File a Sur-Reply. Signed by District Judge Keith Starrett on February 16, 2016 (dsl)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
THE TRAVELERS INDEMNITY
COMPANY, et al.
V.
PLAINTIFFS
CIVIL ACTION NO. 2:14-CV-22-KS-MTP
FORREST COUNTY, et al.
DEFENDANTS
MEMORANDUM OPINION AND ORDER
For the reasons below, the Court grants the Motion for Leave to File [197] a surreply filed by Counter-Plaintiffs Mitchell, Smith, Strong, Dixon, and Ruffin; grants the
Motion for Judgment on the Pleadings [134] filed by Counter-Defendants Swiss RE
International, previously Zurich Specialties London Limited, and Gemini Insurance
Company; and grants the Motion for Judgment on the Pleadings [223] filed by
Counter-Defendant Steadfast Insurance Company.
I. BACKGROUND
This is a liability insurance coverage case arising from a civil rights lawsuit. The
underlying plaintiffs are three individuals convicted of a crime they did not commit and
the children of one the wrongfully convicted plaintiffs. They allege that law
enforcement officers of the City of Hattiesburg, Mississippi, and Forrest County,
Mississippi, coerced their false confessions through violence and threats of violence,
fabricated evidence, ignored potentially exculpatory evidence, and otherwise conspired
to prosecute them without probable cause – all motived by racial animus. These events
happened over thirty years ago, and the wrongfully convicted plaintiffs were not
exonerated until 2010 and 2011, after collectively spending eighty-three years in
prison. They filed a lawsuit against Hattiesburg, Forrest County, and several
individual law enforcement officers in their official and individual capacities. See
Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP, 2015 U.S. Dist. LEXIS 40602 (S.D.
Miss. Mar. 30, 2015) (providing detailed background of the underlying case). Of
particular note to the present case, the Bivens Plaintiffs claim that the Bivens
Defendants have committed continuing civil rights violations over the past thirty years
by failing to come forward and rectify their earlier misconduct.
Several insurance companies – The Travelers Indemnity Company, The
Travelers Indemnity Company of America, United States Fidelity and Guaranty
Company, and St. Paul Fire and Marine Insurance Company (collectively, the
“Travelers Insurers”) – filed a Complaint [1] in this Court seeking a declaratory
judgment that they had no duty to defend or indemnify the Bivens Defendants against
these claims. The Travelers Insurers issued almost two dozen different liability policies
to Forrest County from 1993-1999 and 2005-2014.
The Bivens Defendants filed counterclaims [28, 32] against St. Paul Fire and
Marine Insurance Company (“St. Paul”), claiming that St. Paul had breached its
contractual duty to defend and indemnify them in the underlying suit. The Bivens
Plaintiffs likewise filed counterclaims [62, 63] seeking a declaratory judgment that the
Travelers Insurers have a contractual duty to defend and indemnify the Bivens
Defendants against their civil rights claims. They also filed third-party claims [68]
against Sirius America Insurance Company (“Sirius”), First Mercury Insurance
Company (“First Mercury”), Great American E & S Insurance Company (“Great
2
American”), Zurich Specialties London Limited (“Zurich”), Steadfast Insurance
Company (“Steadfast”), and Gemini Insurance Company (“Gemini”), seeking
declaratory judgments that each insurer was required to defend and indemnify the
Bivens Defendants against their civil rights claims pursuant to liability policies issued
at some point during the past thirty years. The Bivens Defendants then asserted their
own third-party claims [71] against Sirius, First Mercury, Great American, Zurich,
Steadfast, and Gemini.
Zurich1 and Steadfast filed Motions for Judgment on the Pleadings [134, 223] as
to the third-party claims asserted by the Bivens Plaintiffs and Defendants. The
motions are ripe for review.2
1
Zurich is apparently now known as Swiss RE International. For brevity’s
sake, the Court will continue to refer to it as Zurich. Likewise, the Court may refer
to Zurich and Gemini collectively as “Zurich,” except when distinguishing between
the Zurich policies and the Gemini policy.
Throughout this opinion, the Court will refer to the underlying plaintiffs –
Defendants/Counter-Plaintiffs Bivens, Ruffin, Dixon, Smith, and Strong – as the
Bivens Plaintiffs, and it will refer to the underlying defendants –
Defendants/Counter-Plaintiffs Forrest County, City of Hattiesburg, Howell,
Walters, Hopstein, Hart, Martin, Brown, Taylor, Erwin, Moulds, James, and Clark
– as the Bivens Defendants.
2
The Bivens Plaintiffs filed a Motion for Leave to File [197] a sur-reply to
Zurich’s motion, arguing that Zurich presented new arguments in its reply and
exceeded the permitted number of pages. The Court did not consider any new
arguments raised in Zurich’s reply brief, and Zurich’s unilateral decision to exceed
the Court’s permitted number of pages provided it with no unfair advantage. As
Chief Justice Roberts has noted: “I have yet to put down a brief and say, ‘I wish that
had been longer.’” Bryan A. Garner, Interviews with United States Supreme Court
Justices: Chief Justice John G. Roberts Jr., 13 Scribes J. Legal Writing 5, 35 (2010).
Regardless, the Court grants the Bivens Plaintiffs’ Motion for Leave to File [197] a
sur-reply, and the proposed sur-reply [197-1] is deemed filed.
3
II. STANDARD OF REVIEW
A “motion for judgment on the pleadings under Rule 12(c) is subject to the same
standard as a motion to dismiss under Rule 12(b)(6).” Doe v. MySpace, Inc., 528 F.3d
413, 418 (5th Cir. 2008). To survive a motion to dismiss under Rule 12(b)(6), “a
complaint must contain sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.” Great Lakes Dredge & Dock Co. LLC v. La. State,
624 F.3d 201, 210 (5th Cir. 2010) (punctuation omitted). “To be plausible, the
complaint’s factual allegations must be enough to raise a right to relief above the
speculative level.” Id. (punctuation omitted). The Court must “accept all well-pleaded
facts as true and construe the complaint in the light most favorable to the plaintiff.”
Id. But the Court will not accept as true “conclusory allegations, unwarranted factual
inferences, or legal conclusions.” Id. Likewise, “a formulaic recitation of the elements
of a cause of action will not do.” PSKS, Inc. v. Leegin Creative Leather Prods., Inc., 615
F.3d 412, 417 (5th Cir. 2010) (punctuation omitted). “While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.”
Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1950, 173 L. Ed. 2d 868 (2009).
“[D]ocuments that a defendant attaches to a motion to dismiss are considered
part of the pleadings if they are referred to in the plaintiff’s complaint and are central
to her claim.” Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000).
Therefore, the Court may permissibly consider the copies of the subject insurance
policies attached to Counter-Defendants’ motions [134-1, 134-2, 134-3, 134-4, 223-1,
223-2].
4
III. APPLICABLE LAW
A.
Duty to Defend
“Under Mississippi law, an insurer’s duties to defend and indemnify its insured
are distinct and separable duties requiring the use of different standards.” Estate of
Bradley v. Royal Surplus Lines Ins. Co., 647 F.3d 524, 529 (5th Cir. 2011). To
determine whether an insurance company has a duty to defend its policyholder against
suit, the Court looks “at the facts alleged in the complaint, together with the policy.”
Auto. Ins. Co. of Hartford v. Lipscomb, 75 So. 3d 557, 559 (Miss. 2011). “[A]n insurer’s
duty to defend is triggered when the allegations of the complaint reasonably bring a
claim within the coverage of its policy.” Carl E. Woodward, LLC v. Acceptance Indem.
Ins. Co., 749 F.3d 395, 398 (5th Cir. 2014) (quoting Baker Donelson Bearman &
Caldwell, P.C. v. Muirhead, 920 So. 2d 440, 451 (Miss. 2006)) (punctuation omitted).
There is no duty to defend if “the alleged conduct falls outside the policy’s coverage,”
but if the insurer “becomes aware that the true facts, if established, present a claim
against the insured which potentially would be covered under the policy, the insurer
must provide a defense until it appears that the facts upon which liability is predicated
fall outside the policy’s coverage.” Lipscomb, 75 So. 3d at 559.
B.
Duty to Indemnify
“Unlike the duty to defend, which can be determined at the beginning of the
lawsuit, an insurer’s duty to indemnify generally cannot be ascertained until the
completion of the litigation, when liability is established, if at all.” Bradley, 647 F.3d
at 531. “This is because, unlike the duty to defend, which turns on the pleadings and
5
the policy, the duty to indemnify turns on the actual facts giving rise to liability in the
underlying suit, and whether any damages caused by the insured and later proven at
trial are covered by the policy.” Id. But “if there is no duty to defend, there can be no
duty to indemnify.” Evanston Ins. Co. v. Neshoba Cnty. Fair Ass’n, 442 F. Supp. 344,
346 n. 1 (S.D. Miss. 2006).
C.
Interpretation of Insurance Policies
The Court’s ultimate goal in applying an insurance policy is to “render a fair
reading and interpretation of the policy by examining its express language and
applying the ordinary and popular meaning to any undefined terms.” Corban v. United
Servs. Auto. Ass’n, 20 So. 3d 601, 609 (Miss. 2009). “In Mississippi, insurance policies
are contracts, and as such, they are to be enforced according to their provisions.” Id.
First, where an insurance policy is plain and unambiguous, a court must
construe that instrument, like other contracts, exactly as written. Second,
it reads the policy as a whole, thereby giving effect to all provisions.
Third, it must read an insurance policy more strongly against the party
drafting the policy and most favorably to the policy holder. Fourth, where
it deems the terms of an insurance policy ambiguous or doubtful, it must
interpret them most favorably to the insured and against the insurer.
Fifth, when an insurance policy is subject to two equally reasonable
interpretations, a court must adopt the one giving the greater indemnity
to the insured. Sixth, where it discerns no practical difficulty in making
the language of an insurance policy free from doubt, it must read any
doubtful provision against the insurer. Seventh, it must interpret terms
of insurance policies, particularly exclusion clauses, favorably to the
insured wherever reasonably possible. Finally, although ambiguities of
an insurance policy are construed against the insurer, a court must
refrain from altering or changing a policy where terms are unambiguous,
despite resulting hardship on the insured.
Nationwide Mut. Ins. Co. v. Lake Caroline, Inc., 515 F.3d 414, 419 (5th Cir. 2008); see
also Corban, 20 So. 3d at 609; Guidant Mut. Ins. Co. v. Indem. Ins. Co. of N. Am., 13
6
So. 3d 1270, 1281 (Miss. 2009); United States Fid. & Guar. Co. v. Martin, 998 So. 2d
956, 963 (Miss. 2008).
IV. ZURICH’S MOTION FOR JUDGMENT ON THE PLEADINGS [134]
A.
The Zurich Policies
Zurich issued two policies to the Forrest County Sheriff’s Department – Policy
No. ZSL990086 [134-1], effective from November 13, 2000, to November 13, 2001; and
Policy No. NSL010067 [134-2], effective from November 13, 2001, to November 13,
2002. Both policies had the same substantive provisions [134-3]. They generally
provide: “The Company will pay on behalf of the ‘insured(s)’ all ‘damages’ resulting
from a ‘wrongful act(s)’ which arise out of the law enforcement activities. The ‘wrongful
act(s)’ must occur during the policy period . . . .” The policies define a “wrongful act” as
“an actual or alleged error or omission, negligent act, neglect or breach of duty by the
‘insured’ while conducting law enforcement activities, which result[s] in . . . ‘Personal
Injury.’” The definition of “Personal Injury” includes “Assault and/or battery;” “False
arrest, detention or imprisonment, or malicious prosecution;” “Humiliation or mental
distress;” and the “Violation of civil rights or discrimination protected under 42 U.S.C.
1981 et sequentia or State Law.”
Therefore, in general terms, Zurich is obligated to pay all damages resulting
from an actual or alleged error or omission, negligent act, neglect or breach of duty
during the policy period by the Bivens Defendants employed by Forrest County while
they were conducting law enforcement activities which resulted in assault, battery,
false arrest, malicious prosecution, violation of civil rights protected under federal and
7
state law, humiliation, and/or mental distress. Among other things, Zurich argues that
no “specific, plausible conduct attributable to any Forrest County Defendant is alleged
to have occurred during” the policy period. Respondents argue that the Bivens
Plaintiffs’ alleged violations of a continuing duty to come forward with the truth and
rectify the Bivens Defendants’ past misconduct.
Indeed, in the Bivens Plaintiffs’ Second Amended Complaint, they alleged that
they exhausted all avenues of post-conviction relief and “came up for parole numerous
times,” but all such attempts were denied. Second Amended Complaint at 30, Bivens
v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D. Miss. Sept. 16, 2013), ECF No. 61.
They also alleged that the Bivens Defendants “were aware of [their] post-conviction
appeals and parole applications and the basis for them,” but “affirmatively concealed
or otherwise failed to come forward with the truth about their own unconstitutional
conduct in connection with the investigation, the coerced confessions, and the trial,
despite the fact that this evidence could have been used at any time to demonstrate
that” the Bivens Plaintiffs were innocent. Id. at 30-31. The Bivens Plaintiffs alleged:
In each and every year of Mr. Ruffin’s, Mr. Bivens’s and Mr.
Dixon’s combined 83 years of wrongful incarceration, from 1979 to 2010,
Defendants breached their legal and constitutional duties to remedy the
dangerous situation they created fro Plaintiffs and to come forward with
evidence of the Wrongfully Convicted Plaintiffs’ innocence. . . . Even after
their arrests and convictions, Mr. Ruffin, Mr. Bivens, and Mr. Dixon all
could have used the information possessed by Defendants in postconviction motions for relief and petitions for parole. Instead, each time
Mr. Ruffin, Mr. Dixon and Mr. Bivens came up for parole, Defendants
said nothing as many people signed petitions opposing their release and
the parole board denied the petitions.
In so doing, Defendant violated their clearly established and
8
ongoing legal and constitutional duties and affirmative obligations to
come forward in each and every year of Plaintiffs’ ordeal, starting with
Mr. Ruffin’s arrest and through the exonerations of Mr. Ruffin, Mr.
Dixon, and Mr. Bivens, specifically including in 1979, 1980, 1981, 1982,
1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994,
1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006,
2007, 2008, 2009, and 2010, which conduct actually and proximately
caused Mr. Ruffin, Mr. Bivens, and Mr. Dixon to suffer and endure false
detention and false imprisonment, embarrassment, humiliation, mental
and emotional distress, violations of their constitutional rights, personal,
physical and other bodily injuries, and the loss of liberty.
Id. at 32-33. The Bivens Plaintiffs and Defendants argue that this language plainly
alleges “wrongful acts” during the applicable policy period.
According to the policy, a “wrongful act” is “an actual or alleged error or
omission, negligent act, neglect or breach of duty by the ‘insured’ while conducting law
enforcement activities, which result[s] in . . . ‘Personal Injury,’ or . . . ‘Bodily Injury.’”
The definition of “personal injury” includes false imprisonment and the violation of
civil rights. Zurich draws two arguments from these policy provisions. First, although
the policy explicitly covers “omissions” – i.e. failures to act – during the policy period,
Zurich argues that the failure to rectify or disclose prior bad acts is not covered absent
a specific allegation that the underlying defendants committed new and different
affirmative acts during the applicable policy period with the intent to further conceal
or suppress their prior acts. Second, Zurich apparently argues that the Bivens
Plaintiffs’ injuries – being imprisoned for a crime they did not commit and the
consequential injuries flowing from such imprisonment – did not “result” from the
Bivens Defendants’ failure to come forward during the policy period. Rather, Zurich
contends that the Bivens Plaintiffs’ alleged injuries resulted from the Bivens
9
Defendants’ alleged actions over thirty years ago.
Other courts have framed wrongful conviction coverage questions in a variety
of ways, despite the substantial similarity among the various states’ laws regarding
a liability insurer’s duty to defend or indemnify. Some courts have conducted a
straightforward comparison of the language from the policy and complaint, looking for
factual allegations of covered conduct within the applicable policy period.3 Other courts
have focused on the public policy implications and practical consequences flowing from
the coverage determination.4 Many courts have analogized civil rights claims like those
asserted by the Bivens Plaintiffs’ to malicious prosecution or other tort claims.5 Finally,
some courts have waded into the semantics of causation, concluding that injuries
occurring during a wrongfully convicted plaintiff’s imprisonment were ultimately
3
See, e.g. Sarsfield v. Great Am. Ins. Co. of N.Y., 335 F. App’x 63, 67-68 (1st
Cir. 2009); Maryland Casualty Company v. Franklin County, Mississippi, No. 3:08CV-596-WHB-LRA (S.D. Miss. Sept. 2, 2010); Coregis Ins. Co. v. City of Harrisburg,
No. 1:03-CV-920, 2006 U.S. Dist. LEXIS 20340, at *38 (M.D. Penn. Mar. 30, 2006);
Waters v. W. World Ins. Co., 982 N.E. 2d 1224, *2-*4 (Mass. App. Ct. 2013).
4
See, e.g. Gulf Underwriters Ins. Co. v. City of Council Bluffs, 755 F. Supp. 2d
988 (S.D. Iowa 2010); N. River Ins. Co. v. Broward County Sheriff’s Office, 428 F.
Supp. 2d 1284, 1290 (S.D. Fla. 2006).
5
See, e.g. Chicago Ins. Co. v. City of Council Bluffs, 713 F.3d 963, 970-71 (8th
Cir. 2013); Genesis Ins. Co. v. City of Council Bluffs, 677 F.3d 806, 814-15 (8th Cir.
2012); Nat’l Cas. Co. v. McFatridge, 604 F.3d 335, 344-45 (7th Cir. 2010); TIG Ins.
Co. v. City of Elkhart, No. 3:13-CV-902, 2015 U.S. Dist. LEXIS 107807, at *12-*16
(N.D. Ind. Aug. 17, 2015); Selective Ins. Co. of S.C. v. City of Paris, 681 F. Supp. 2d
975, 982-83 (C.D. Ill. 2010); Westport Ins. Corp. v. City of Waukegan, No. 14-CV-419,
2016 U.S. Dist. LEXIS 5216, at *9-*15 (N.D. Ill. Jan. 15, 2016); City of Harrisburg,
2006 U.S. Dist. LEXIS 20340 at *32-*34; Indian Harbor Ins. Co. v. City of
Waukegan, 33 N. E. 3d 613, 617-18 (Ill. App. Ct. 2015); St. Paul Fire & Marine Ins.
Co. v. City of Zion, 18 N. E. 3d 193, 197-98 (Ill. App. Ct. 2014).
10
caused by the wrongful arrest and conviction, rather than any failure to act during a
later policy period.6
Here, the parties’ briefs contain a little bit of everything from the cases cited
above. For example, the Bivens Plaintiffs and Defendants argue that the plain
language of the Bivens Plaintiffs’ Second Amended Complaint brings it within the
scope of coverage, while Zurich argues that the Bivens Plaintiffs failed to allege any
specific actions or inactions by the Bivens Defendants during the policy periods. Zurich
also argues that the Bivens Plaintiffs’ injuries were caused by the Bivens Defendants’
alleged actions over thirty years ago, while the Bivens Plaintiffs and Defendants argue
that the injuries were caused by alleged inaction during the policy periods.
Regardless of how the question is framed, the authorities cited above tend to
agree that an official’s failure to come forward during the applicable policy period and
rectify civil rights violations which occurred prior to the policy period does not trigger
coverage under an occurrence policy7 issued years after the wrongful arrest and
conviction, absent a new, independent wrongful act during the policy period. See, e.g.
6
See, e.g. Sarsfield v. Great Am. Ins. Co. of N.Y., 833 F. Supp. 2d 125, 130 (D.
Mass. 2008); Broward County, 428 F. Supp. 2d at 1290; City of Harrisburg, 2006
U.S. Dist. LEXIS 20340 at *32-*34; Indian Harbor, 33 N. E. 3d at 623.
7
“An ‘occurrence’ policy covers the insured for acts or omissions that occur
within the policy period, regardless of whether the claim is brought to the attention
of the insured or made known to the insurer during the policy period. In contrast, a
‘claims-made’ policy covers the insured only for claims made during the policy
period regardless of when the covered act or omission occurred.” Matador Petroleum
Corp. v. St. Paul Surplus Lines Ins. Co., 174 F.3d 653, 658 n. 2 (5th Cir. 1999)
(punctuation and citation omitted).
11
Gulf Underwriters Ins. Co., 755 F. Supp. 2d at 1002; Westport Ins. Corp., 2016 U.S.
Dist. LEXIS 5216 at **9-*10; TIG Ins. Co., 2015 U.S. Dist. LEXIS 107807 at *16-*17.
Of course, the Court must be wary of relying too heavily on decisions from other
jurisdictions insofar as this case is governed by Mississippi law. See Liberty Mut. Fire
Ins. Co. v. Canal Ins. Co., 177 F.3d 326, 331 (5th Cir. 1999). But the Court has
previously addressed this question and found that a complaint that failed to include
specific factual allegations of actions occurring during the applicable policy period did
not allege a “wrongful act” during the policy period. Opinion and Order, Maryland Cas.
Co. v. Franklin County, Miss., No. 3:08-CV-596-WHB-LRA, at 11-12 (S.D. Miss. Sept.
2, 2010), ECF No. 36.8 Here, the Bivens Plaintiffs generally alleged that the Bivens
Defendants violated their civil rights by failing to come forward with the truth after
conviction, but they failed to allege any specific actions or omissions by any specific
defendant. Generalized, conclusory allegations of concealment are not sufficient to
trigger coverage. Id. at 11-12; Sarsfield, 335 F. App’x at 67-68; Gulf Underwriters Ins.
Co., 755 F. Supp. 2d at 1001; Sarsfield, 833 F. Supp. 2d at 130; Coregis Ins. Co., 2006
U.S. Dist. LEXIS 20340 at *37. Likewise, courts have consistently rejected the notion
of a “continuing trigger” or “multiple triggers” throughout the term of a wrongfully
convicted plaintiff’s imprisonment. See, e.g. Chicago Ins. Co., 713 F.3d at 971; Genesis
8
The policy at issue in Maryland Cas. Co. v. Franklin County appears to have
been a combination of a “claims-made” policy and an “occurrence” policy. In other
words, the policy required both that a claim be first made during the policy period,
and that it arise from a “wrongful act” occurring during the policy period. Id. at 10.
The Court only addressed the second condition – whether the claim arose from a
“wrongful act” occurring during the policy period. Id.
12
Ins. Co., 677 F.3d at 815-16; Gulf Underwriters Ins. Co., 755 F. Supp. 2d at 1002;
Sarsfield, 833 F. Supp. 2d at 131; TIG Ins. Co., 2015 U.S. Dist. LEXIS 107807 at *17;
City of Harrisburg, 2006 U.S. Dist. LEXIS 20340 at *35.
For these reasons, the Court finds that the Bivens Plaintiffs did not allege any
specific actions or omissions by the Bivens Defendants during the applicable policy
periods. Accordingly, they did not allege any “wrongful acts” occurring during the
policy periods. Therefore, Zurich has no duty to defend the Bivens Defendants against
the Bivens Plaintiffs’ claims, and if there is no duty to defend, there can be no duty to
indemnify. Evanston, 442 F. Supp. 2d at 346 n. 1; Nationwide Ins. Co. v. Lexington
Relocation Servs., LLC, No. 1:12-CV-181-SA-DAS, 2014 U.S. Dist. LEXIS 38308, at *41
(N.D. Miss. Mar. 24, 2014); State Farm Fire & Cas. Co. v. Anderson, No. 1:11-CV-304KS-JMR, 2013 U.S. Dist. LEXIS 57837, at *17 (S.D. Miss. Apr. 23, 2014).
B.
Contrary Case Law
The Court will briefly address several cases raised by the Bivens Plaintiffs and
Defendants in opposition to the pending motions for judgment on the pleadings.
1.
Nat’l Cas. Co. v. Franklin County
First, Respondents cite this Court’s decision in National Casualty Company v.
Franklin County, 718 F. Supp. 2d 785 (S.D. Miss. 2010). There, the Court found that
the underlying plaintiffs’ complaint included specific allegations of wrongful acts
arising from the underlying defendants’ law enforcement activities, and that the
insurer had a duty to defend against the underlying claims. Id. at 789-90.
National Casualty is distinguishable because the policy at issue there was a
13
claims-made policy, providing coverage for any claim first made during the policy
period for a loss resulting from wrongful acts arising from law enforcement activities.
Id. at 788. The Court did not address whether the complaint alleged wrongful acts
during the policy period. Id. Moreover, the underlying complaint included specific facts
concerning the defendants’ alleged wrongful acts. The Court acknowledged as much in
another coverage case arising from the same conviction – Maryland Casualty Company
v. Franklin County, Mississippi, No. 3:08-CV-596-WHB-LRA (S.D. Miss. Sept. 2, 2010),
ECF No. 36. In the Maryland case, the Court noted the same allegations from the
underlying complaint, but it held that none of them related to acts during the
applicable policy period. Id. at 11-12. As the Maryland policy was an occurrence policy,
the insurer had no duty to defend or indemnify. Id. at 14.
2.
Boyce v. Bennett
Next, Respondents cite an Opinion and Order from Boyce v. Bennett, No. 2:14CV-249 (E.D. Va. Mar. 20, 2015), ECF No. 103.9 There, the court held, in pertinent
part, that a wrongfully convicted plaintiff had stated a claim against law enforcement
officers for intentional infliction of emotional distress because he alleged that they
“fraudulently and deliberately failed to provide prosecutors with” exculpatory evidence,
and continued to “fraudulently withhold” the evidence after his trial. Id. at 10.
Respondents contend, therefore, that Boyce supports their argument that the Bivens
Defendants’ failure to come forward with the truth after the wrongful conviction
9
See also Boyce v. Bennett, No. 2:14-CV-249, 2015 U.S. Dist. LEXIS 151875
(E.D. Va. Nov. 9, 2015) (addressing motions to dismiss by other defendants).
14
constitutes a “wrongful act” during the policy periods.
Boyce is distinguishable because it is not a liability insurance coverage case, and,
therefore, it does not address the question of when a wrongful act occurs for the
purpose of determining law enforcement liability coverage under an occurrence policy.
Some courts have drawn a distinction between when a wrongful act occurs for
insurance coverage purposes and when it occurs for general tort purposes. See Genesis
Ins. Corp., 677 F.3d at 812-15; Selective Ins. Co., 681 F. Supp. 2d at 980-84; Gulf
Underwriters Ins. Co., 755 F. Supp. 2d at 999 n. 13. Regardless, the complaint in Boyce
[193-3] included specific factual allegations of post-conviction misconduct, while the
Bivens Plaintiffs failed to allege any specific “wrongful acts” during the applicable
policy periods.
3.
Waters v. W. World Ins. Co.
Respondents also cite Waters v. Western World Insurance Company, 982 N. E.
2d 1224 (Mass. App. Ct. 2013). There, the court found that an underlying complaint
included allegations that “plainly implicate[d] acts, errors and omissions during the
period of Western World’s coverage.” Id. at *4. If the generalized, conclusory allegations
cited in the Waters opinion, see id. at *3-*4, are all that the underlying plaintiffs
alleged, the undersigned judge must respectfully disagree with the Massachusetts
court’s conclusion. The Court further notes that the Waters court failed to discuss the
law surrounding coverage questions arising from wrongful conviction cases, further
decreasing the persuasiveness of the decision.
4.
City of Sharonville v. Am. Employers Ins. Co.
15
Respondents cite City of Sharonville v. American Employers Insurance
Company, 846 N. E. 2d 833 (Ohio 2006). There, the court generally held that the
“issuer of a law-enforcement policy has a duty to defend its insured against an action
when the complaint contains an allegation of conduct that could arguably be considered
covered by the policy.” Id. at 838. However, Sharonville has no bearing on this case
insofar as it does not address when a “wrongful act” occurs for purposes of determining
coverage under an occurrence policy. Rather, the Sharonville insurer argued that
conduct alleged in the underlying complaint was outside the scope of the officers’
employment, and that the conduct alleged was excluded as intentional fraudulent
and/or criminal acts. Id. at 837.
5.
Nat’l Cas. Ins. Co. v. Mt. Vernon
Respondents also cite National Casualty Insurance Company v. City of Mt.
Vernon, 128 A. D. 2d 332 (N.Y. App. Div. 1987). There, the court held that the
underlying complaint alleged “that a covered personal injury – false imprisonment –
was sustained after the effective date of the policy,” and that the policy “trigger[ed]
coverage once specified injuries are sustained during the policy period.” Id. at 336. The
“language of the occurrence clause ascribe[d] no temporal relevance to the causative
event preceding the covered injury, but rather premise[d] coverage exclusively upon
the sustaining of specified injuries during the policy period.” Id. The Mt. Vernon policy,
therefore, did not require that the wrongful act causing the injury occur during the
policy period, as the policies here require.
6.
Moore v. The Flintkote Co.
16
Respondents cite an order entered by the Circuit Court of Jackson County,
Mississippi, in Moore v. The Flintkote Company, No. 89-5138(1) (Dec. 23, 1991), a
coverage case arising from claims of property damage by asbestos. The court held that
“[f]or the purposes of insurance coverage, damage to buildings from asbestoscontaining products occurs at the time such products are in place and the damage
continues as long as the building contains the products.” Id. at 3. Moore is
distinguishable insofar as it does not address when a “wrongful act” occurs for purposes
of triggering coverage under a law enforcement liability occurrence policy, and courts
addressing such cases have consistently rejected application of a “continuing trigger,”
as explained above. See, e.g. Chicago Ins. Co., 713 F.3d at 971; Genesis Ins. Co., 677
F.3d at 815-16; Gulf Underwriters Ins. Co., 755 F. Supp. 2d at 1002; Sarsfield, 833 F.
Supp. 2d at 131; TIG Ins. Co., 2015 U.S. Dist. LEXIS 107807 at *17; City of
Harrisburg, 2006 U.S. Dist. LEXIS 20340 at *35.
7.
Gen. Star Nat’l Ins. Co. v. Isley
Finally, Respondents cite an order entered by a lower court in North Carolina,
General Star National Insurance Company v. Isley, No. 12 CVS 014726 (July 25, 2013).
There, the court denied an insurer’s motion for judgment on the pleadings on the basis
that the underlying complaint included specific allegations that an underlying
defendant had provided grand jury testimony leading to an indictment, which caused
the institution of criminal proceedings against the underlying plaintiff. Id. at 1. As
noted above, the Bivens Plaintiffs provided no specific allegations of wrongful acts
occurring during the applicable policy periods.
17
C.
The Gemini Policy
Gemini issued a Law Enforcement Liability Insurance policy [134-4] to the
Forrest County Sheriff’s Department: Policy Number UGL0000109-00, effective from
November 13, 2004, to November 13, 2005. Gemini agreed to “pay those sums that the
Insured becomes legally obligated to pay as ‘damages’ because of a ‘wrongful act’
arising out of law enforcement activities by or on behalf of the Named Insured,”
provided that “[t]he ‘wrongful act’ is committed or occurs during the policy period . . .
.” Gemini likewise agreed to defend the Forrest County Sheriff’s Department against
“any ‘claim’ or ‘suit’ seeking ‘damages’ to which [the] insurance applies.” The policy
defines a “wrongful act” as “an actual or alleged error, omission, act, neglect or breach
of duty by the insured while conducting law enforcement activities which result[s] in
. . . ‘Personal Injury’ . . . .” The policy’s definition of “personal injury” includes “[f]alse
arrest,” “detention or imprisonment,” “malicious prosecution,” “[h]umiliation or mental
distress,” and the “[v]iolation of civil rights or discrimination protected under 42 USC
1981 and sequential enacted legislation, or state law . . . .”
Therefore, in general terms, Gemini is obligated to defend and indemnify against
claims resulting from an actual or alleged error or omission, negligent act, neglect or
breach of duty during the policy period by the Bivens Defendants employed by Forrest
County while they were conducting law enforcement activities which resulted in false
arrest, malicious prosecution, violation of civil rights protected under federal and state
law, humiliation, and/or mental distress, among other injuries.
Like Zurich, Gemini argues that the Bivens Plaintiffs failed to allege any specific
18
wrongful acts by the Bivens Defendants during the applicable policy period. For the
same reasons provided above, the Court agrees. Therefore, Gemini has no duty to
defend the Bivens Defendants against the Bivens Plaintiffs’ claims, and if there is no
duty to defend, there can be no duty to indemnify. Evanston Ins. Co., 442 F. Supp. 2d
at 346 n. 1; Nationwide Ins. Co., 2014 U.S. Dist. LEXIS 38308 at *41; Anderson, 2013
U.S. Dist. LEXIS 57837 at *17.
V. STEADFAST’S MOTION FOR JUDGMENT ON THE PLEADINGS [223]
Steadfast issued two law enforcement liability insurance policies to the Forrest
County Sheriff’s Department: Policy No. 3627978-00, effective from November 13,
2002, to November 13, 2003 [223-1]; and Policy No. 3627978-01, effective from
November 13, 2003, to November 13, 2004 [223-2]. The policies are identical in their
relevant parts. They generally provide that Steadfast will “pay on behalf of the insured
all ‘damages’ resulting from a ‘wrongful act(s)’ which arise out of the law enforcement
activities,” and that “[t]he ‘wrongful act(s)’ must occur during the policy period . . . .”
Steadfast likewise agreed to defend “any ‘claim’ or ‘suit’ against any insured even if the
allegations of the ‘claim’ or ‘suit’ are groundless, false or fraudulent.” The policies
define a “wrongful act” as “an actual or alleged error, omission, act, neglect or breach
of duty by the insured while conducting law enforcement activities which result[s] in
. . . ‘[p]ersonal injury’ . . . .” The definition of “personal injury” includes “[f]alse arrest,
detention, or imprisonment;” “malicious prosecution;” “mental distress;” and the
“[v]iolation of civil rights or discrimination protected under 42 USC 1981 and
sequential enacted legislation, or state law . . . .”
19
Therefore, in general terms, Steadfast is obligated to defend and indemnify
against claims resulting from an actual or alleged error or omission, negligent act,
neglect or breach of duty during the policy period by the Bivens Defendants employed
by Forrest County while they were conducting law enforcement activities which
resulted in false arrest, malicious prosecution, violation of civil rights protected under
federal and state law, humiliation, and/or mental distress, among other injuries.
Like Zurich and Gemini, Steadfast argues that the Bivens Plaintiffs failed to
allege any specific wrongful acts by the Bivens Defendants during the applicable policy
periods. For the same reasons provided above, the Court agrees. Therefore, Steadfast
has no duty to defend the Bivens Defendants against the Bivens Plaintiffs’ claims, and
if there is no duty to defend, there can be no duty to indemnify. Evanston Ins. Co., 442
F. Supp. 2d at 346 n. 1; Nationwide Ins. Co., 2014 U.S. Dist. LEXIS 38308 at *41;
Anderson, 2013 U.S. Dist. LEXIS 57837 at *17.
VI. CONCLUSION
For the reasons provided above, the Court grants the Motion for Leave to File
[197] a sur-reply filed by Counter-Plaintiffs Mitchell, Smith, Strong, Dixon, and Ruffin;
grants the Motion for Judgment on the Pleadings [134] filed by Counter-Defendants
Swiss RE International, previously Zurich Specialties London Limited, and Gemini
Insurance Company; and grants the Motion for Judgment on the Pleadings [223] filed
by Counter-Defendant Steadfast Insurance Company.
SO ORDERED AND ADJUDGED this 16th day of February, 2016.
s/Keith Starrett
20
UNITED STATES DISTRICT JUDGE
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