The First Circuit recently upheld a trial court’s ruling that an insurer need not defend or indemnify the defendants in a wrongful conviction claim where the wrongful acts occurred prior to the policy period. Sarsfield v. Great American Ins. Co., No. 08-1890 (July 1, 2009).
The claimant was convicted of rape in 1987 and served ten years in prison before being exonerated due to DNA evidence. He then sued the City of Marlborough, Massachusetts, alleging two basic wrongs that led to his false conviction: (1) the police engaged “in a highly suggestive identification process that coerced the victim” to identify the claimant; and (2) a police officer falsely reported several incriminating statements by the Claimant. The city settled with the claimant, stipulating to liability and assigned to him all of their rights under insurance policies issued to the city.
Claimant, as assignee of the City, sought coverage under the Law Enforcement Liability Coverage included in general liability policies issued to the city. The insurer denied coverage on the basis that the alleged wrongful acts occurred before the applicable policy periods. Despite the policy’s clear occurrence language (“‘wrongful act(s)’ which occurs . . . during the policy period”), the claimant then sued the city’s insurer arguing that (1) the policies should in fact be treated as “claims-made” policies; or (2) “wrongful acts,” namely, the continued concealment of the police department’s wrongdoing occurred during his incarceration (within the policy period). Both the District Court and First Circuit rejected the first argument. As to the second, the First Circuit agreed with the District Court’s finding that “the only concealment specifically discussed [in the Complaint] was tied to concealment from the prosecutor” leading to claimant’s conviction, which occurred well prior to the policy periods.