Many municipalities protect their police force by purchasing insurance for law enforcement liability. This coverage protects the municipality against law suits seeking damages for injuries resulting from law enforcement activities or operations caused by a wrongful act that is commented while conducting law enforcement activities. Just exactly what is an injury that triggers coverage was addressed recently by the Sixth Circuit.
In St. Paul Guardian Insurance Co. v. City of Newport, No. 19-5948 (6th Cir. Mar. 30, 2020) (Not Recommended for Publication), a person convicted of rape and murder was acquitted over 28-years later after DNA testing. Charges were dismissed and the former prisoner sued the city under 42 U.S.C. § 1983 for several claims, including malicious prosecution, due process violations in withholding evidence and failure to train and supervise. The policy covering the city was issued nearly 20-years after the conviction. The insurer brought an action for an order declaring that it had no duty to defend or indemnify the city. The district court granted summary judgment to the insurer and the Sixth Circuit reversed.
The law enforcement liability coverage provided as follows:
We’ll pay amounts any protected person is legally required to pay as damages for covered injury or damage that:
- results from law enforcement activities or operations by or for you;
- happens while this agreement is in effect; and
- is caused by a wrongful act that is committed while conducting law enforcement operations.
Injury or damage was defined as “bodily injury, personal injury, or property damage.” “Bodily injury” was defined as “any harm to the health of other persons.” “Personal injury” was defined as “injury, other than bodily injury, caused by any of the following wrongful acts [, including] . . . [m]alicious prosecution.”
The only real issue in the appeal was one of contract interpretation; whether the complainant’s injuries happened while the insurance policy was in effect. The court referred to a Fifth Circuit case that interpreted the same policy language. See Travelers Indem. Co. v. Mitchell, 925 F.3d 236, 241 (5th Cir. 2019). The court agreed with the Fifth Circuit that under the terms of the policy, the insurer must defend any claim in which covered injuries occurred while the policy was in effect regardless of when the wrongful act occurred. What the Fifth Circuit held was that the parties bargained for an injury-based trigger of coverage, not an act-based trigger. So only injury had to happen during the policy period, not the law enforcement activities or the wrongful act committed while conducting law enforcement operations.
The court analyzed two questions: what was the complainant’s injuries and when did those injuries happen? The court rejected the insurer’s argument that the complaint alleged a malicious prosecution injury, which happened at the time of the prosecution well before the policy was in force. The court held that the allegation was a malicious prosecution claim, but that the injuries were the various harms that were caused by or flowed from that wrongful act.
Based on the policy language, the court rejected the holding in other cases that held a malicious prosecution claim triggers coverage under policies in effect at the initiation of the prosecution. The court found that the injury-based trigger in the policy made a difference and to follow those cases would, in effect, be writing in an act-based trigger that did not exist.
The court also noted that in the early policies issued, there was a provision that deemed property damage to relate back to the wrongful act, but in later policies, there was a deemer clause that applied to bodily and personal injuries as well. The court found that the insurer knew at the time of the earlier policies how to achieve the result it was arguing for in this case. Accordingly, the court stuck to its view of the language providing for the injury-based trigger, which included injuries occurring because of the malicious prosecution during the time of incarceration and while the policies were in force.