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Vol. 10 - Issue 1

January 11, 2021


St. Paul Guardian Insurance Company v. City of Newport (6th Circuit Court of Appeals)

Rarity: Applying Injury-In-Fact Trigger To A Malicious Prosecution Claim


The exoneration of someone wrongfully convicted of a serious crime has been a frequent news story for many years.  The statistics are staggering.  According to the National Registry of Exonerations, a joint project of the University of California Irvine and the law schools at Michigan and Michigan State, over 2,700 people have been exonerated since 1989.

Individuals win their freedom – often after decades behind bars -- for various reasons: DNA testing proving innocence, discovery of prosecutorial misconduct, false/coerced confessions, witness recantation, discrediting so-called “junk science” used to convict and others.

Not surprisingly, once freed, exonerees sometimes bring civil suits, generally alleging violation of their civil rights and tort claims, seeking damages from those they believe responsible for their wrongful conviction.  Defendants usually include police departments and prosecutors.

These are serious cases with potentially significant awards.  And when the defendants are in small towns, it stands to reason that their ability to pay a judgment or settlement, especially a large one, is tied to the extent of their liability insurance – usually commercial general liability or law enforcement liability or sometimes both types of policies.

So it comes as no surprise that a proliferation of lawsuits by exonerees, seeking damages for their wrongful convictions, has led to an abundance of litigation addressing coverage for such claims.

While these coverage actions can involve various issues, the one most frequently litigated is trigger of coverage.  Again, no surprise.  If the objective is to secure as much money as possible for wrongful conviction claims, then insureds, or underlying plaintiffs, attempt to secure coverage under as many policy years as possible.

But, for the most part, insureds have not fared well on that front.  Wiley’s Benjamin Eggert, in a superb white paper published last year on the subject of coverage for wrongful convictions, drew this conclusion: “Across a spectrum of extraordinary allegations in wrongful conviction lawsuits, courts routinely hold that the trigger of coverage is when the claimant’s rights were first violated, which usually is the start of the criminal process against the claimant.”  “Wrongful Conviction 2020: The Rising Tide of Insurance Trigger Litigation,” p. 13, published at wiley.law.  [“Eggert Paper”].  More specifically, Mr. Eggert notes that, between 2010 and 2019, more than 50 decisions have addressed the trigger issue “[a]nd nearly all of them adopted some variation of the view that the policy in effect at the initiation of the prosecution triggered coverage.”  Eggert Paper at 14.  

The impact is obvious.  If trigger of coverage is when the criminal process against the claimant first began, then only one policy year will be implicated.  What’s more, since it is the policy year at the beginning of the process, it may have lower limits compared to policies purchased by the municipal defendant in later years.  As a result, the amount of insurance dollars available, to satisfy wrongful conviction claims, is likely far less than what’s sought.

Of course, adoption of an injury-in-fact or continuous trigger, for wrongful conviction claims, would go a long way to changing this outcome.  It is well-known what the adoption of those coverage triggers did for bringing insurance dollars to the table for asbestos and hazardous waste claims.              

But, as Mr. Eggert notes: “Courts uniformly have rejected attempts to argue that a continuous or other theory of multiple trigger applies in the context of a wrongful conviction action, even where state law has applied such triggers in situations such as latent or progressive injury cases.”  Eggert Paper at 19.

All of this background is to explain why I chose the Sixth Circuit’s decision, in St. Paul Guardian Insurance Company v. City of Newport, No. 1905948 (6th Cir. Mar. 30, 2020), as one of 2020’s ten most significance coverage cases.  The court in City of Newport adopted an injury-in-fact trigger–concluding that multiple polices could be obligated to provide coverage for wrongful conviction. 

Admittedly, the decision does not involve commercial general liability policies, which are often at issue in malicious prosecution coverage cases.  However, it may give other courts an entree, to adopting an injury-in-fact trigger, in an effort to increase the amount of money available for wrongful conviction claims.  Given that many states have not addressed trigger of coverage for wrongful conviction, the decision has an opportunity to be influential on other courts.  A court writing on a blank slate may be persuaded to take the same route.

At issue in City of Newport: On the strength of DNA evidence, William Virgil was released from prison after serving 28 years for murder.  He was granted a new trial.  The charges were subsequently dismissed.  Virgil sued the City of Newport, Kentucky and various police officers for, among other things, malicious prosecution. 

Virgil had been convicted in 1988 and was released from prison in 2015.  St. Paul insured Newport under three, one-year law enforcement liability policies, issued from July 2007 to July 2010.  Thus, St. Paul was on the risk while Virgil was incarcerated.  St. Paul filed an action seeking a declaratory judgment that it had no duty to defend or indemnify Newport or its officers.  

The operative language of the policies is 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” is defined as “bodily injury, personal injury, or property damage.”  “Bodily injury” means “any harm to the health of other persons.”  “Personal injury” means any “injury, other than bodily injury, caused by any of the following wrongful acts[, including. . . [m]alicious prosecution.”

The district court granted St. Paul’s motion for summary judgment, agreeing with the insurer that the personal injury complained of happened decades prior to the policy periods.

The Sixth Circuit reversed.  At the core of the court’s decision was its interpretation of the provision in the insuring agreement that Virgil’s injuries must have “happened while” the policies were in effect.  And the court had little trouble concluding that they did. 

In doing so, the court rejected St. Paul’s argument that Virgil’s injuries happened when he was “criminally charged or bound over for trial.”  St. Paul pointed to what it characterized as the “majority rule” – that malicious prosecution claims trigger coverage under policies in effect only at the initiation of the prosecution.

The flaw in St. Paul’s argument, the court concluded, was that its policies “feature an ‘injury-based trigger of coverage, not an act-based trigger.’”

The court explained that “Virgil did not allege a malicious prosecution injury; he raised, among others, a malicious prosecution claim. The injuries alleged in his complaint are the various harms that were caused by or flowed from that wrongful act.” (emphasis added).

Virgil alleged that his injuries were spending “more than 28 years incarcerated for crimes he did not commit, resulting in ‘emotional pain and suffering’ and ‘loss of a normal life,’ depriving him of ‘nearly a decade of life experiences.’”  The court agreed that these injuries “happened while” the St. Paul policies were in effect (while Virgil was incarcerated).

The question will likely be asked whether, given the particular policy language at issue, is City of Newport really a departure from the majority rule – that malicious prosecution claims trigger coverage under policies in effect only at the initiation of the prosecution.

The policies at issue in City of Newport were not commercial general liability, but, rather, Law Enforcement Liability, with coverage triggered for injuries that “happened while” the policies were in effect.  As the City of Newport court noted, this is an injury-based trigger of coverage and not an act-based trigger. 

However, commercial general liability policies, which are often at issue in malicious prosecution claims, typically employ an act-based trigger, providing coverage for damages because of a “personal and advertising injury” offense, which includes malicious prosecution, committed during the policy period.
Even with this potential limiting factor, City of Newport stands in such a marked contrast to the body of case law, holding that only the policy in effect at the initiation of the prosecution is triggered, that I included it as one of 2020’s ten most significance coverage cases.  Not to mention, as noted above, many states have yet to address this issue.


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