The Travelers Indemnity Company et al v. Forrest County et al
Filing
518
MEMORANDUM OPINION AND ORDER granting in part and denying in part 416 Motion for Summary Judgment; finding as moot 484 Motion to Strike. Signed by District Judge Keith Starrett on 7/7/2016 (scp)
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 in part and denies in part the
Motion for Summary Judgment [416] filed by Swiss RE International SE, formerly
Zurich Specialties London Limited (“ZSLL”), and it denies as moot the Motion to
Strike [484] filed by ZSLL.
I. BACKGROUND
This is a liability insurance coverage case arising from a civil rights lawsuit. The
Court previously discussed the case’s background. See Travelers v. Forrest County, No.
2:14-CV-22-KS-MTP, 2016 U.S. Dist. LEXIS 18288, at *6-*9 (S.D. Miss. Feb. 16, 2016);
Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP, 2015 U.S. Dist. LEXIS 40602, at *3*10 (S.D. Miss. Mar. 30, 2015). On February 16, 2016, the Court granted [370] motions
for judgment on the pleadings filed by ZSLL, Gemini Insurance Company, and
Steadfast Insurance Company. See Travelers, 2016 U.S. Dist. LEXIS 18288 at *31-*32.
The Court ruled that the Bivens Plaintiffs1 had not alleged any specific wrongful acts
1
The Court will refer to the underlying plaintiffs – Defendants/CounterPlaintiffs Bivens, Ruffin, Dixon, Smith, and Strong – as the Bivens Plaintiffs. The
Court will refer to the underlying defendants – Defendants/Counter-Plaintiffs
Forrest County, City of Hattiesburg, Howell, Walters, Hopstein, Hart, Martin,
or omissions during the applicable policy periods, and that ZSLL, Gemini, and
Steadfast had no duty to defend or indemnify the Bivens Defendants against the Bivens
Plaintiffs’ claims.
The parties then filed numerous dispositive motions [258, 344, 346, 349, 351,
353, 354, 355, 359, 361, 363, 365], each addressing an insurer’s duty to defend and/or
indemnify the Bivens Defendants against the Bivens Plaintiffs’ claims. On April 20,
2016, the Bivens Plaintiffs filed a Third Amended Complaint. See Third Amended
Complaint, Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D. Miss. Apr. 20,
2016), ECF No. 307. Anticipating that the parties would need to address the Bivens
Plaintiffs’ new allegations, the Court denied [401] all pending dispositive motions
without prejudice, and set a new motions deadline. Once again, the parties filed
numerous dispositive motions [402, 404, 406, 408, 410, 412, 414, 416, 418, 420, 422,
424, 426, 428, 430, 432, 434, 437].
The Bivens Plaintiffs and Defendants filed a Motion for Reconsideration [424]
of the Court’s order [370] granting the motions for judgment on the pleadings. On June
22, 2016, the Court granted [502] the motion for reconsideration in part and denied it
in part. See Travelers Ind. Co. v. Forrest County, No. 2:14-CV-22-KS-MTP, 2016 U.S.
Dist. LEXIS 81206 (S.D. Miss. June 22, 2016). Specifically, the Court granted the
motion with respect to its previous ruling that ZSLL had no duty to defend or
Brown, Taylor, Erwin, Moulds, James, and Clark – as the Bivens Defendants. The
Court may also refer to the Bivens Plaintiffs and Defendants collectively as the
Bivens Parties.
2
indemnify the Bivens Defendants in the underlying case, but the Court denied the
motion in all other respects. Id. at *17. The Court held that the Bivens Plaintiffs had
alleged specific omissions and/or breaches of duty by the Bivens Defendants during the
ZSLL policy periods, id. at *14-*16, but that they had not alleged any specific wrongful
acts during the Gemini and Steadfast policy periods. Id. at *13. For these same
reasons, the Court granted [504] the Motions for Summary Judgment [410, 414] filed
by Steadfast and Gemini on June 23, 2016. See Travelers Ind. Co. v. Forrest County,
No. 2:14-CV-22-KS-MTP, 2016 U.S. Dist. LEXIS 81826 (S.D. Miss. June 23, 2016).
On June 29, 2016, the Court granted in part and denied in part [515] the Motion
for Summary Judgment [418] filed by The Travelers Indemnity Company, The
Travelers Indemnity Company of America, United States Fidelity & Guaranty
Company, and St. Paul Fire and Marine Insurance Company (collectively, “Travelers”),
and it granted the Bivens Parties’ Motion for Partial Summary Judgment [432] as to
Travelers. Travelers Ind. Co. v. Forrest County, No. 2:14-CV-22-KS-MTP, 2016 U.S.
Dist. LEXIS 84534 (S.D. Miss. June 29, 2016). Specifically, the Court held that
Travelers had no duty to defend or indemnify the Bivens Defendants under a variety
of general liability policies issued to Forrest County and the City of Hattiesburg, but
that it did have a duty to defend the Bivens Defendants under a law enforcement
liability policy issued to the Forrest County Board of Supervisors. Id. at *22.
On June 30, 2016, the Court granted in part and denied in part [516] Sirius
America Insurance Company’s Motion for Summary Judgment [402] and granted in
part and denied in part the Bivens Parties’ Motion for Partial Summary Judgment
3
[422] as to Sirius America. Travelers Ind. Co. v. Forrest County, No. 2:14-CV-22-KSMTP, 2016 U.S. Dist. LEXIS 85399 (S.D. Miss. June 30, 2016). Specifically, the Court
held that Sirius America has a duty to defend the Bivens Defendants under a law
enforcement liability policy effective from November 13, 1984, to November 13, 1985,
but that it has no duty to defend or indemnify under a policy effective from October 7,
1984, to November 13, 1984. Id. at *11. The Court additionally held that Sirius
America has no duty to defend or indemnify any of the claims against the Bivens
Defendants Larry James, Jim Erwin, and Arlon Moulds. Id. at *14.
On July 1, 2016, the Court granted in part and denied in part Great American
E&S Insurance Company’s Motion for Summary Judgment [404] and denied the Bivens
Parties’ Motion for Partial Summary Judgment as to Great American. Travelers
Indem. Co. v. Forrest County, No. 2:14-CV-22-KS-MTP, 2016 U.S. Dist. LEXIS 86108
(S.D. Miss. July 1, 2016). Specifically, the Court found that Great American has no
duty to defend the Bivens Defendants in the underlying case, but the Court could not
determine whether it has a duty to indemnify under several law enforcement liability
policies issued to the Forrest County Sheriff’s Department from November 13, 1996,
to November 13, 2000. Id. at *19-*20. The Court now considers ZSLL’s Motion for
Summary Judgment [416].
II. STANDARD OF REVIEW
Rule 56 provides that “[t]he court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a); see also Sierra Club, Inc.
4
v. Sandy Creek Energy Assocs., L.P., 627 F.3d 134, 138 (5th Cir. 2010). “An issue is
material if its resolution could affect the outcome of the action.” Sierra Club, Inc., 627
F.3d at 138. “An issue is ‘genuine’ if the evidence is sufficient for a reasonable jury to
return a verdict for the nonmoving party.” Cuadra v. Houston Indep. Sch. Dist., 626
F.3d 808, 812 (5th Cir. 2010).
The Court is not permitted to make credibility determinations or weigh the
evidence. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir. 2009). When deciding
whether a genuine fact issue exists, “the court must view the facts and the inference
to be drawn therefrom in the light most favorable to the nonmoving party.” Sierra
Club, Inc., 627 F.3d at 138. However, “[c]onclusional allegations and denials,
speculation, improbable inferences, unsubstantiated assertions, and legalistic
argumentation do not adequately substitute for specific facts showing a genuine issue
for trial.” Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002).
III. MOTION FOR SUMMARY JUDGMENT [416]
ZSLL issued two law enforcement liability policies [134-3] to the Forrest County
Sheriff’s Department: policy No. ZSL990086 [416-1], effective from November 13, 2000,
to November 13, 2001; and policy No. ZSL010067 [416-2], effective from November 13,
2001, to November 13, 2002. ZSLL argues that these policies do not require it to defend
or indemnify the Bivens Defendants against the Bivens Plaintiffs’ claims.
“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
5
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.
“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
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. Typically, though, “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).
The Court’s ultimate goal in applying an insurance policy is to “render a fair
6
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
So. 3d 1270, 1281 (Miss. 2009); United States Fid. & Guar. Co. v. Martin, 998 So. 2d
956, 963 (Miss. 2008).
Both policies had the same substantive provisions [416-1, 416-2, 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 . . . .” Exhibit C to Motion for
Judgment on the Pleadings at 2, Travelers Ind. Co. v. Forrest County, No. 2:14-CV-227
KS-MTP (S.D. Miss. May 14, 2015), ECF No. 134-3. 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.’” Id. at 5. 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” state or federal law. Id. Therefore, in general terms, ZSLL is obligated
to pay all damages resulting from an actual or alleged error or omission, negligent act,
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 state law, humiliation, and/or mental distress.
The Bivens Plaintiffs specifically alleged that the Bivens Defendants failed to
come forward with the truth at Bivens’ parole hearing on May 24, 2001, Dixon’s parole
hearing on April 24, 2001, and Ruffin’s parole hearing on May 23, 2001. The
Bivens Plaintiffs also alleged that the Bivens Defendants’ failure to come forward with
the truth at the parole hearings caused them to remain falsely imprisoned and suffer
further violations of rights protected by federal and state law. These allegations are
sufficient to trigger coverage for damages resulting from “wrongful acts” under policy
No. ZSL990086 [416-1, 134-3], effective from November 13, 2000, to November 13,
2001. However, the Bivens Plaintiffs’ allegations do not trigger coverage under policy
No. ZSL010067 [416-2, 134-3], effective from November 13, 2001, to November 13,
8
2002, as they alleged no specific “wrongful acts” during that policy period.
A.
Particularized Allegations
ZSLL argues that the Third Amended Complaint does not contain any
allegations of conduct during the applicable policy periods that would trigger coverage
under either policy. It contends that the Bivens Plaintiffs’ latest pleading relies on
broad, conclusory allegations that the Bivens Defendants continued to remain silent
about exculpatory evidence after the Bivens Plaintiffs’ conviction, without identifying
any specific actions taken during the applicable policy period. The Court disagrees. The
Bivens Plaintiffs specifically alleged that the Bivens Defendants breached their duty
to come forward with exculpatory evidence at specific parole hearings during a ZSLL
policy period, and the policies’ definition of “wrongful act” includes omissions while
conducting law enforcement activities that result in personal injuries, including false
imprisonment and the violation of rights protected under federal and state law.
B.
Triggered at Time of Arrest/Indictment
ZSLL adopts previous arguments that the Court should treat the Bivens
Plaintiffs’ claims as other jurisdictions have treated malicious prosecution claims,
holding that the trigger is, at latest, when the exonerated person is charged or indicted
for the crime. The Court rejects this argument for the same reasons provided in a
previous opinion. See Travelers, 2016 U.S. Dist. LEXIS 84534 at *12-*14.
C.
Continuation of Prior Acts/Continuous Trigger Theory
ZSLL also adopts previous arguments that the Bivens Plaintiffs only alleged
continuations of prior wrongful acts during the applicable policy period. The Court
9
rejects this argument for the same reasons provided in a previous opinion. Travelers,
2016 U.S. Dist. LEXIS 85399 at *43-*45.
D.
Fraud/Crime Exclusion
The ZSLL policies [416-1, 416-2, 134-3] included the following exclusion:
This policy does not apply and the Company has no obligation to defend
any “claim or “suit”:
***
3.
For “damages” arising out of the willful violation of a penal
statute or ordinance committed by or with the knowledge or
consent of the “insured,” or “claims” of injury arising out of
acts of fraud committed by or at the direction of any
“insured” with affirmative dishonesty or actual intent to
deceive or defraud.
Exhibit C to Motion for Judgment on the Pleadings at 3, Travelers Ind. Co. v. Forrest
County, No. 2:14-CV-22-KS-MTP (S.D. Miss. May 14, 2015), ECF No. 134-3. ZSLL
argues that all of the conduct alleged by the Bivens Plaintiffs “is intentional and
violates criminal statutes,” and that it arises out of “fraudulent, dishonest, malicious
or criminal conduct that resulted in the underlying convictions.”
“The insurer bears the burden to produce evidence to support its affirmative
defense that the causes of the losses are excluded by the policy.” Hoover v. United
Servs. Auto. Ass’n, 125 So. 3d 636, 642 n. 7 (Miss. 2013); see also Corban, 20 S. 3d at
618. “Exclusions and limitations on coverage are . . . construed in favor of the insured.
Language in exclusionary clauses must be clear and unmistakable, as those clauses are
strictly interpreted.” Corban, 20 So. 3d at 609 (quoting Martin, 998 So. 2d at 963); see
also State Farm Mut. Auto. Ins. Co. v. Logisticare Solutions, LLC, 751 F.3d 684, 688
10
(5th Cir. 2014).
As noted in a previous opinion,2 the Bivens Plaintiffs alleged more actions and
omissions than the Court cares to count, committed by numerous defendants, across
a period of decades in a pleading that is seventy-nine pages long. Although ZSLL listed
several criminal statutes that it contends the Bivens Defendants violated,3 it failed to
connect the dots between the Bivens Plaintiffs’ allegations and the elements of the
various crimes. More importantly, ZSLL failed to provide any legal support for its bald
assertion that the alleged wrongful acts during its policy periods constituted or arose
from criminal or fraudulent conduct. The Court declines to apply the crime/fraud
exclusion on such a flimsy basis. If ZSLL wants the exclusion to apply, it will have to
“show its math” and demonstrate that each wrongful act or omission during its policy
periods alleged in the Third Amended Complaint constitutes or arises from a criminal
or fraudulent act or omission.
E.
Mississippi Public Policy
The policies’ definition of “damages” does not include “matters which may be
deemed uninsurable under the law pursuant to which this policy shall be construed.”
Exhibit C to Motion for Judgment on the Pleadings at 4, Travelers Ind. Co. v. Forrest
County, No. 2:14-CV-22-KS-MTP (S.D. Miss. May 14, 2015), ECF No. 134-3. ZSLL
argues that the Bivens Defendants’ alleged conduct violates criminal statutes and is,
2
Travelers, 2016 U.S. Dist. LEXIS 84534 at *23-*24.
3
ZSLL cited 18 U.S.C. §§ 241, 242 and MISS. CODE ANN. §§ 97-1-1(1), 97-3-7,
97-9-125.
11
therefore, uninsurable under Mississippi law. The Court rejects this argument for the
same reasons it rejects the crime/fraud exclusion argument.
F.
During “Law Enforcement Activities”
The policies provide coverage for “all ‘damages’ resulting from a ‘wrongful act(s)’
which arise out of the law enforcement activities.” Id. at 2. Likewise, 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 . . . .”Id. at
5. ZSLL argues that the Bivens Defendants’ failure to come forward with exculpatory
information before the parole board is not an omission during the performance of “law
enforcement activities.”
The policy does not define “law enforcement activities,” and ZSLL’s briefing
provides little help. It not only failed to cite any legal authority in support of this
argument, it failed to make any substantive argument whatsoever. Instead, it relies
on a bare assertion that the failure to come forward to the parole board is not an
omission during the performance of “law enforcement activities.” This is not a sufficient
basis to grant summary judgment in its favor.
G.
Timely Notice
The ZSLL policies [416-1, 416-2, 134-3] include the following notice provision:
SECTION IV – CONDITIONS
***
4.
Insureds Duties in the event of an “occurrence”, “claim”, or
“suit”.
12
a.
b.
If a “claim” is made or “suit” is brought against the
“insured”, the “insured” shall immediately forward to
the Company every demand, notice, summons or
other process received by the “insured” or the
“insured’s” representatives.
c.
5.
In the event of an “occurrence”, written notice
containing particulars sufficient to identify the
“insured” and also reasonably obtainable information
with respect to the time, place and circumstances
thereof, and the names and addresses of the insured
and of available witnesses, shall be given by or for
the “insured” to the Company or any of its authorized
agents as soon as practicable.
The “insured” shall cooperate with the Company and
upon the Company’s request, submit to examination
and interrogation by a representative of the
Company, under oath if necessary, and attend
hearings, depositions and trails [sic], and shall assist
in the effective settlement, and the securing and
giving of a written statement or statements to the
Company representatives and defense counsel. In the
event of a “claim” occurring which is likely to involve
the Company hereunder, the “insured” shall not
make any payment, assume any liability, or incur
any expense without the consent of the Company first
being obtained. The Company shall conduct in the
name of the “insured” the defense of any “claim” for
“damages”, or otherwise against any third party, and
shall have full discretion in the handling of such
“claim” or “suit”, and the “insured” shall give full
information and assistance as the Company may
reasonably require.
Action Against the Company. No action shall lie against the
Company unless, as a condition precedent thereto, there
shall have been full compliance with all of the terms of this
policy, nor until the amount of the “insured’s” obligation to
pay shall have been finally determined whether by
judgement [sic] against the “insured” after trial or by
written agreement of the “insured”, the claimant and the
Company.
13
Exhibit C to Motion for Judgment on the Pleadings at 5-6, Travelers Ind. Co. v. Forrest
County, No. 2:14-CV-22-KS-MTP (S.D. Miss. May 14, 2015), ECF No. 134-3. ZSLL
argues that the Bivens Defendants failed to provide timely notice of the Bivens
Plaintiffs’ claims as required under these provisions, and, therefore, they are barred
from recovering under the policies.
“The purpose of notice provisions in insurance policies is to give the insurance
company the chance to settle or litigate claims for which it ultimately might be liable.”
Ingalls Shipbuilding v. Fed. Ins. Co., 410 F.3d 214, 227 (5th Cir. 2005). “Under
Mississippi law, delay in giving notice is excusable under certain circumstances, but
such delay must have occurred without fault or negligence on the part of the insured.”
Bolivar County Bd. of Supervisors v. Forum Ins. Co., 779 F.2d 1081, 1085 (5th Cir.
1986). “[W]here an insurance policy requires notice as a condition precedent to
coverage, coverage may still be allowed unless the insurer suffered prejudice due to
delay; that prejudice is a question of fact.” Jackson v. State Farm Mut. Auto. Ins. Co.,
880 So. 2d 336, 341 (Miss. 2004).4 Likewise, “the question whether an insured in an
4
ZSLL argues that it is not required to prove prejudice if the policy requires
notice as a condition precedent to coverage. Some older cases support this
argument. See, e.g. Boliver County, 779 F.2d at 1085; Reliance Ins. Co. v. County
Line Place, Inc., 692 F. Supp. 694, 697 (S.D. Miss. 1988); Hartford Acc. & Indem.
Co. v. Hattiesburg Hardware Stores, 49 So. 2d 813, 819 (Miss. 1951); Employers’
Liability Assurance Corp. v. Jones County Lumber Co., 72 So. 152, 154 (Miss. 1916).
But a more recent decision by the Mississippi Supreme Court requires insurers to
prove prejudice even when provision of notice is a condition precedent to coverage.
Jackson, 880 So. 2d at 341; see also First Pentecostal Church of Jackson v. Bhd.
Mut. Ins. Co., No. 3:09-CV-34-TSL-FKB, 2010 U.S. Dist. LEXIS 71386, at *16 n. 4
(S.D. Miss. July 15, 2010).
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action on a policy indemnifying him from liability . . . gave timely notice . . . is a
question of fact to be determined by the jury . . . .” Lawler v. Government Employees
Ins. Co., 569 So. 2d 1151, 1153 (Miss. 1990).
The Bivens Defendants were served with process in the underlying suit on
January 22, 2013 [416-5]. ZSLL contends that the Bivens Defendants did not provide
notice of the suit until September 22, 2014. During the intervening twenty months, the
following events occurred in the underlying litigation:
•
The Defendants answered the Plaintiffs’ First and Second
Amended Complaints;5
•
The parties deposed the last living wrongfully incarcerated
Plaintiff, Philip Bivens, to preserve his testimony;6
•
The parties engaged in limited discovery as to any investigatory or
prosecutorial files related to the Plaintiffs’ prosecutions and
convictions;7
•
Numerous individual Defendants filed motions to dismiss;8
5
Answer, Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D. Miss. Mar.
18, 2013), ECF No. 29; Answer, Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP
(S.D. Miss. Sept. 26, 2013), ECF No. 64; First Amended Answer, Bivens v. Forrest
County, No. 2:13-CV-8-KS-MTP (S.D. Miss. Dec. 23, 2013), ECF No. 76.
6
Notice of Receipt of Original Deposition, Bivens v. Forrest County, No. 2:13CV-8-KS-MTP (S.D. Miss. June 11, 2013), ECF No. 49.
7
Interim Case Management Order, Bivens v. Forrest County, No. 2:13-CV-8KS-MTP (S.D. Miss. July 23, 2013), ECF No. 54.
8
Motion to Dismiss, Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D.
Miss. May 22, 2014), ECF No. 94; Motion to Dismiss, Bivens v. Forrest County, No.
2:13-CV-8-KS-MTP (S.D. Miss. May 22, 2014), ECF No. 97; Motion to Dismiss,
Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D. Miss. May 22, 2014), ECF
No. 99; Motion to Dismiss, Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D.
15
•
Defendant Gene Walters, the Sheriff of Forrest County at the time
of the Plaintiffs’ arrests and convictions, died;9 and
•
The last living wrongfully incarcerated Plaintiff, Philip Bivens,
died.10
ZSLL argues that the twenty-month delay in notice, during which the events listed
above occurred, constitutes prejudice “as a matter of law.”
The Court believes there are at least two genuine disputes of material fact
relevant to application of the notice provision. First, there is a genuine dispute of
material fact as to when ZSLL received notice of the suit. The Bivens Parties provided
evidence [387-2] that the Bivens Plaintiffs’ counsel had a telephone conversation and
exchanged correspondence with Kathy Weber, a senior vice president of Western
Litigation, a third-party claims administrator for ZSLL, on May 27, 2014. Additionally,
on June 25, 2014, the Bivens Plaintiffs noticed a deposition [139] of U.S. Risk
Insurance Group, Inc., the agency which procured the ZSLL policies for the Bivens
Defendants. “Under Mississippi law, notice given to an agent is imputed to the
insurance company . . . .” State v. Richardson, 817 F.2d 1203, 1207 (5th Cir. 1987).
Miss. May 23, 2014), ECF No. 102; Motion to Dismiss, Bivens v. Forrest County, No.
2:13-CV-8-KS-MTP (S.D. Miss. May 26, 2014), ECF No. 105; Motion to Dismiss,
Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D. Miss. May 26, 2014), ECF
No. 107.
9
Suggestion of Death, Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D.
Miss. May 28, 2014), ECF No. 118.
10
Suggestion of Death, Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D.
Miss. Oct. 3, 2014).
16
Therefore, there exists a genuine dispute of material fact as to when ZSLL received
notice of the suit.
Regardless of when ZSLL received notice of the suit, the Court believes there
also exists a genuine dispute of material fact as to whether ZSLL was prejudiced by the
delay. The delay in notice was only one of numerous reasons ZSLL denied coverage. If
ZSLL would have declined to participate in the Bivens Defendants’ defense regardless
of the delay in notice, then it remains to be seen how the delay in notice prejudiced it.
The Court further notes that ZSLL’s argument on this issue primarily consists of
conclusory declarations that a twenty-month delay in notice during which parties to
the litigation died is prejudicial per se, without any substantial elaboration as to what
it would have gained by participating in the litigation earlier.
For these reasons, the Court finds that there are genuine disputes of material
fact regarding the application of the policy’s notice provision.
H.
Individual Defendants Not Employed by Forrest County
The policies define “insured” as “the ‘named insured,’ all full or part-time
employees, all auxiliary or volunteer law enforcement officers of the ‘named insured’
and the public entity of which the law enforcement agency is a part including the
elected and appointed officials for their law enforcement related acts.” Exhibit C to
Motion for Judgment on the Pleadings at 4, Travelers Ind. Co. v. Forrest County, No.
2:14-CV-22-KS-MTP (S.D. Miss. May 14, 2015), ECF No. 134-3. It is undisputed that
the following individual Bivens Defendants were not employed by Forrest County in
any capacity during the applicable policy period of November 13, 2000, to November
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13, 2001: Gene Walters, Joe Hopstein, Henry Brown, Terry Martin, Larry James, Jim
Erwin, and Arlon Mounds. Therefore, no coverage exists under the policies for the
Bivens Plaintiffs’ claims arising from any wrongful actions or omissions committed by
these individuals.
IV. MOTION TO STRIKE [484]
ZSLL and Gemini Insurance Company filed a Motion to Strike [484] declarations
of David Miller [385-1, 387-1], the Bivens Defendants’ former counsel, presented in
opposition to Gemini and ZSLL’s motions for summary judgment. The Court has
already addressed both Gemini and ZSLL’s motions for summary judgment, and it did
not consider the disputed declarations. Accordingly, the motion to strike is denied as
moot.
V. CONCLUSION
For these reasons, the Court grants in part and denies in part the Motion for
Summary Judgment [416] filed by Zurich Specialties London Limited. Specifically, the
Court grants the motion insofar as it finds that ZSLL has no duty to defend or
indemnify the Bivens Defendants against any claims asserted by the Bivens Plaintiffs
arising from wrongful actions or omissions committed by the following individual
Bivens Defendants: Gene Walters, Joe Hopstein, Henry Brown, Terry Martin, Larry
James, Jim Erwin, and Arlon Mounds. The Court also grants the motion with respect
to ZSLL’s duty to defend and/or indemnify the Bivens Defendants against the Bivens
Plaintiffs’ claims under policy No. ZSL010067 [416-2, 134-3], effective from November
13, 2001, to November 13, 2002. The Court denies the motion in all other respects.
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The Court also denies as moot the Motion to Strike [484] filed by Zurich
Specialties London Limited and Gemini Insurance Company.
SO ORDERED AND ADJUDGED this 7th day of July, 2016.
s/ Keith Starrett
UNITED STATES DISTRICT JUDGE
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