The Nebraska Supreme Court has determined that rape convictions that were wrongfully obtained by a county's cold case investigation team triggered the insurer's "personal injury" coverage notwithstanding a policy exclusion for professional services. The case is Gage Cty. v. Emplrs Mut. Cas. Co., 304 Neb. 926 (2020).
Helen Wilson was raped and murdered in Beatrice, Nebraska, on February 5, 1985. Months were spent investigating the heinous crime before the case became cold. In 1989, several members of the Gage County Sheriff's office reopened the case.
After the initial investigation, the Gage County Attorney charged six individuals with crimes related to Wilson's tragic death. Those individuals became known collectively as the Beatrice Six. Four of the six agreed to plead guilty and testify against the remaining two, Joseph White and Thomas Winslow. A jury convicted White of Wilson's murder, and Winslow entered a no contest plea. Nearly two decades later, after the Six had collectively served over seventy years in prison, the Beatrice Six were exonerated when DNA evidence showed that none of them were present at the crime scene. In 2009, the Nebraska Board of Pardons granted pardons to each member of the Beatrice Six.
On February 2, 1989, Gage County purchased three insurance policies from Empire Mutual Casualty Company (EMC), a CGL policy, a linebacker policy, and an umbrella policy, all three effective from February 2, 1989, to February 2, 1990. The CGL policy was written on an occurrence basis with a $1 million limit per occurrence and $2 million aggregate limit. Under the policy, EMC agreed to pay sums that Gage County became legally obligated to pay as damages for "'personal injury' . . . to which this insurance applies." The policy said that the insurance applied to personal injury only if caused by an offense during the policy period and arising out of the conduct of the insured's business. Personal injury was defined to include false arrest, detention, imprisonment, or malicious prosecution. An endorsement that was added to the policy excluded coverage for "'personal injury'. . . due to the rendering [of] or failure to render any professional service." The policy and endorsement failed to define professional services. The umbrella policy contained similar provisions, providing coverage for "loss in excess of the primary limit" of the other two policies, but excluding liability arising out of "professional liability" or "excluded operations liability." The umbrella policy defined professional liability, though, and listed several professions that were included, but specified that the exclusion was not limited to excluding only those listed professions. The umbrella policy also listed several jobs that fell under the "occupations liability exclusion," one of which was law enforcement. The county did not contend that the linebacker policy provided coverage for the judgments.
In July 2009, five of the Six filed civil rights lawsuits in the U.S. District Court for the District of Nebraska, and the sixth followed suit, filing in 2011. The cases were consolidated and called Gage County, the county's sheriff's office and attorney's office, and the investigating sheriff and his deputies in their official capacities as defendants. The complaints alleged that the defendants had manufactured and coerced false or misleading evidence to arrest, prosecute and eventually imprison the Beatrice Six. They also alleged that the defendants made intentional misrepresentations in arrest warrants, used improper interrogation techniques, led a reckless investigation, and intentionally went through with prosecution despite lacking evidentiary support. The complaints claimed malicious prosecution, false arrest, conspiracy, and having policies, practices, and customs that derived the Beatrice Six of civil rights. EMC denied responsibility related to the CGL and the umbrella policies citing the exclusions for "professional services."
Gage County sued EMC in 2017, alleging that EMC had a responsibility to defend and indemnify Gage County up to the $2 million limit in the CGL policy, and potentially more under the umbrella policy. Gage County argued that law enforcement, as an occupation, did not fall under the professional services exclusion in the two relevant policies.
In November 2018, a district judge ruled that the policies did not cover the mismanagement of the case, and ruled for EMC and the applicability of the professional services exclusion.
Gage County appealed to the Nebraska Supreme Court, which considered the question of whether EMC met its burden to prove that the professional services exclusion applied on the facts above. The court found in favor of the county, stating that when the three policies were taken and analyzed as a whole contract, the reasonable person would understand that the professional services exclusion is not applicable to acts of law enforcement.
The case was remanded for further findings of the scope of coverage available under the EMC policies.
Editors Note: In this case, the Court looked at the umbrella and linebacker policies as enhancements to the CGL policy. In the linebacker policy, law enforcement was not listed in the exclusive list of professions, and in the umbrella policy, law enforcement was clearly listed as an occupation, not a profession.
The lesson to learn from this case is that the court will always err on the side of the insured and that policies that provide an interrelated pattern of insurance will be interpreted as doing such by the court.