County of Dutchess v. Argonaut Insurance Co.
150 A.D.3d 672
| N.Y. App. Div. | 2017Background
- Dewey Bozella was convicted of murder in 1983, retried and reconvicted in 1991, and had his conviction vacated in 2009 based on allegedly undisclosed exculpatory (Brady) evidence.
- Bozella sued the County of Dutchess under 42 U.S.C. § 1983, alleging the County had an unconstitutional Brady disclosure policy that caused his deprivation of rights; the only remaining federal claim was against the County under Monell.
- The County tendered defense and indemnity to its insurer Argonaut under a public entity policy; Argonaut disclaimed coverage and denied defense/indemnity.
- The County (and co-plaintiff assistant DA) sued Argonaut for a declaratory judgment that Argonaut must defend and indemnify the County in the federal action.
- Supreme Court (Dutchess County) denied plaintiffs’ summary judgment, granted Argonaut’s cross-motion, and declared Argonaut not obligated to defend or indemnify; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Argonaut must defend/indemnify County for Bozella §1983 Monell claim | County: policy covers public officials and law enforcement liability; insurer must defend pending resolution | Argonaut: alleged wrongful acts fall outside policy periods and are excluded as related to law enforcement/criminal justice functions | Held: No coverage — acts predated retroactive/effective dates and exclusion for law enforcement/criminal justice functions applies |
| Whether wrongful acts are barred by retroactive/effective dates in policy coverage parts | County: wrongful acts relate to ongoing practice; should trigger coverage | Argonaut: alleged Brady withholding occurred in part before policy retroactive date (public officials coverage) and before effective date (law enforcement coverage) | Held: Acts occurred partly/first committed prior to relevant dates; no coverage under those coverage parts |
| Whether the policy exclusion for activities "by or on behalf of any law enforcement agency" applies | County: allegations are broader municipal policy, not purely law enforcement activity | Argonaut: allegations squarely involve administration of criminal justice and law enforcement functions; exclusion is clear | Held: Exclusion is clear and unambiguous and applies; thus it bars coverage |
| Whether Argonaut waived its coverage defenses by delay or conduct | County: insurer failed to timely disclaim or otherwise waived defenses | Argonaut: failure to disclaim based on an exclusion does not create coverage where none exists | Held: No waiver; insurer did not relinquish known rights and absence of disclaimer based on exclusion does not create coverage |
Key Cases Cited
- Monell v. New York City Dept. of Social Services, 436 U.S. 658 (municipal liability requires policy or custom)
- Brady v. Maryland, 373 U.S. 83 (prosecutor must disclose exculpatory evidence)
- Continental Cas. Co. v. Rapid-American Corp., 80 N.Y.2d 640 (insurer must prove clear, unmistakable exclusion to negate coverage)
- Garson Mgt. Co. v. Travelers Indem. Co. of Ill., 300 A.D.2d 538 (ambiguities in exclusions construed against insurer; unambiguous provisions given plain meaning)
- National Union Fire Ins. Co. of Pittsburgh, Pa. v. Pardo, 208 A.D.2d 702 (scope of law enforcement/criminal-justice exclusion)
- New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308 (failure to disclaim based on exclusion does not create coverage)