A federal district court in Iowa recently held that a lawsuit against a city for malicious prosecution and civil rights violations did not trigger certain insurance policies issued to the city, because the relevant events did not occur during the policy periods. See Gulf Underwriters Ins. Co. v. City of Council Bluffs, No. 4:07-cv-00135 (etc.) (S.D. Iowa Dec. 20, 2010). A copy of the decision is available here.

The claimants were arrested in 1977 for murder and convicted the following year. In 1999, they discovered exculpatory evidence that had been withheld. They sued to overturn their convictions in 2000, which the Iowa Supreme Court did in 2003. In 2005, they sued for various violations of §1983, which the court characterized generally as “malicious prosecution” claims.

One insurer issued a policy covering “wrongful acts” occurring in 2000. The city first argued that certain deposition testimony by police in 2000 was wrongful, but the court found that the evidence only raised “metaphysical doubt” as to material facts, which is not enough to withstand summary judgment. The city also argued that its ongoing failure to correct past errors was a wrongful act triggering the policies, but the court rejected this argument as well. The court found that there was no “new, separate wrongful act” causing a “distinct injury” during the policy period.

Another insurer issued “occurrence”-based commercial general liability policies from 2002 to 2004. While “malicious prosecution” and “violations of civil rights” were offenses listed under the definition of “personal injury,” the insurer similarly argued that no such injury occurred during the policy periods. Apparently lacking Iowa law on the subject of trigger of coverage, the court cited case law from outside the state (including the 2010 Massachusetts case of Billings v. Commerce Ins. Co.) and held that coverage is triggered when the injury first “manifests” itself. In this case, that occurred when the claimants were convicted in 1978, even if they remained incarcerated in 2002. The fact that the malicious prosecution claims did not accrue until 2003 when the convictions were overturned was irrelevant, said the court. Coverage is triggered when the injury occurred, not when liability accrued.