122 F. Supp. 3d 795
N.D. Ind.2015Background
- Christopher Parish was wrongfully arrested in Nov. 1996, convicted in 1998, exonerated (criminal charges dismissed) in Dec. 2006, and released in July 2006 after ~8 years in custody.
- Parish sued the City of Elkhart and Detective Rezutko under 42 U.S.C. § 1983 and Indiana tort law; the jury found liability and after appellate proceedings the case settled for $5 million in Jan. 2014.
- National Casualty Company (NCC) was Elkhart’s primary Law Enforcement Liability (LEL) insurer for 1996–2000, defended under reservation, and ultimately paid the $5 million settlement and defense costs, then sued other insurers for contribution.
- Multiple other insurers provided primary or excess/umbrella LEL coverage to Elkhart in later years (TIG 1997–2000 excess; Swiss Re/Zurich 2001–2003 primary; Gemini 2004 primary; Northfield 2003 primary; St. Paul 2005–2007 primary; Clarendon excess 2005–2008).
- Insurers moved for judgment on the pleadings seeking declarations they had no duty to defend or indemnify for the Parish settlement, arguing coverage triggers and exclusions preclude liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What event triggers coverage for wrongful-conviction/malicious-prosecution claims (filing of charges vs. exoneration)? | NCC: trigger is exoneration (2006), so later insurers should contribute. | Moving insurers: trigger is earlier (when charges filed / occurrence), so their policies (post-2000/2003) do not cover. | Court: Determine trigger by each policy's language; for the insurers moving here, the covered wrongful acts/damage occurred outside their policy periods—no coverage. |
| Do Swiss Re/Gemini (2001–2004 primaries) have duty to defend or indemnify for Parish’s settled §1983 claim? | NCC: Allegations include ongoing policies/practices that could implicate those years. | Swiss Re/Gemini: Their policies require a "wrongful act" during the policy period; Parish’s misconduct predated their policies. | Held: No duty to defend or indemnify; granted declaratory judgment for Swiss Re and Gemini. |
| Does TIG (1997–2000 excess occurrence-based policy) cover the settlement or defense costs? | NCC: TIG’s period overlaps relevant events (conviction 1998); NCC at times agreed exoneration governs. | TIG: Policy is occurrence-based; the occurrence (malicious prosecution) occurred when charges were filed in 1996–1998, before TIG’s excess period or not within its scope; excess policy disclaims defense cost obligations. | Held: TIG’s policy does not cover settlement or defense costs; motion granted. |
| Do St. Paul / Northfield / Clarendon (2003–2007 primary/excess) have liability for settlement or defense? | NCC: Settlement and defense costs should be shared; alleges some continuing harm during those policy years. | Insurers: Policy language requires covered injury/damage to occur during policy period; the injury occurred earlier (arrest/conviction), so no coverage. | Held: No duty to defend or indemnify; motions granted for St. Paul, Northfield, and Clarendon. |
Key Cases Cited
- Parish v. City of Elkhart, 702 F.3d 997 (7th Cir. 2012) (affirming liability, remanding for damages)
- Parish v. City of Elkhart, 614 F.3d 677 (7th Cir. 2010) (discussing accrual of certain tort claims)
- Northfield Ins. Co. v. City of Waukegan, 701 F.3d 1124 (7th Cir. 2012) (Seventh Circuit precedent on coverage trigger issues)
- National Cas. Co. v. McFatridge, 604 F.3d 335 (7th Cir. 2010) (prior Seventh Circuit treatment of trigger for malicious prosecution coverage)
- Genesis Ins. Co. v. City of Council Bluffs, 677 F.3d 806 (8th Cir. 2012) (malicious-prosecution occurrence triggers at filing of charges; rejects multiple-trigger theory)
- City of Erie v. Guaranty Nat’l Ins. Co., 109 F.3d 156 (3d Cir. 1997) (criticizing exoneration trigger; policy reasons for filing-date trigger)
- Keene Corp. v. Ins. Co. of N. Am., 667 F.2d 1034 (D.C. Cir. 1981) (multiple-trigger analysis in latent-injury/asbestos contexts)
- Thomson, Inc. v. Ins. Co. of N. Am., 11 N.E.3d 982 (Ind. Ct. App. 2014) (Indiana appellate discussion of occurrence/"happening" language)
- Huntzinger v. Hastings Mut. Ins. Co., 143 F.3d 302 (7th Cir. 1998) (Indiana-law articulation that time of occurrence is when the party was actually damaged)