Opinion
CIVIL ACTION NO. 17-115-DLB-CJS
2019-07-31
ST. PAUL GUARDIAN INSURANCE COMPANY, et al., Plaintiffs v. CITY OF NEWPORT, et al., Defendants
Justin Matthew Schaefer, Schiller Barnes Maloney PLLC, Michael S. Maloney, Schiller, Osbourn, Barnes & Maloney, PLLC, Louisville, KY, for Plaintiff. Jason Charles Kuhlman, The Law Office of Jason C. Kuhlman, PLLC, Fort Mitchell, KY, Elliot Slosar, Pro Hac Vice, Michael I. Kanovitz, Loevy & Loevy-IL, Chicago, IL, Amy Robinson Staples, Loevy & Loevy-KY, Shelbyville, KY, for Defendant.
Justin Matthew Schaefer, Schiller Barnes Maloney PLLC, Michael S. Maloney, Schiller, Osbourn, Barnes & Maloney, PLLC, Louisville, KY, for Plaintiff.
Jason Charles Kuhlman, The Law Office of Jason C. Kuhlman, PLLC, Fort Mitchell, KY, Elliot Slosar, Pro Hac Vice, Michael I. Kanovitz, Loevy & Loevy-IL, Chicago, IL, Amy Robinson Staples, Loevy & Loevy-KY, Shelbyville, KY, for Defendant.
MEMORANDUM OPINION AND ORDER
David L. Bunning, United States District Judge
I. INTRODUCTION
This is a declaratory-judgment action concerning an insurance-coverage dispute stemming from underlying civil-rights litigation. Plaintiffs St. Paul Guardian Insurance Company, The Phoenix Insurance Company, and The Travelers Indemnity Company of America (collectively, "Plaintiffs" or the "Plaintiff-Insurers") bring this action asking the Court to declare that they have no duty to defend and indemnify Defendants City of Newport, Mark Brandt, Norm Wagner, Pat Moore, Howard Niemeier, Sarah Tolle (nee Sarah Desentz), Robert Bradford, Tom Fromme, and Rick Sears (collectively, "Newport Defendants") in a separate civil-rights action brought by Defendant William Virgil against the Newport Defendants, No. 2:16-cv-224 (E.D. Ky.) (the "Virgil Suit").
The Virgil Suit alleges that the Newport Defendants violated Mr. Virgil's constitutional rights in the course of his wrongful conviction and imprisonment in the 1980s. (Doc. # 1-1). In this action, the Newport Defendants claim that Plaintiffs should defend and indemnify them in the Virgil Suit because Plaintiffs sold the City of Newport six insurance policies—each providing law-enforcement-liability coverage, public-entity-management-liability coverage, and general-liability coverage—for policy periods extending from July 1, 2007 through July 1, 2013. Plaintiffs assert that coverage is barred by policy exclusions, and that coverage was not triggered because Mr. Virgil's conviction and the alleged wrongful misconduct occurred decades prior to the applicable policy periods. The Court has independent subject-matter jurisdiction over this action based upon diversity of citizenship under 28 U.S.C. § 1332.
See Toledo v. Jackson , 485 F.3d 836, 839 (6th Cir. 2007) (explaining that the Declaratory Judgment Act does not provide an independent basis for federal subject-matter jurisdiction and therefore "a federal court must have jurisdiction [independently] ... under some other federal statute").
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The Virgil Suit
On April 13, 1987, Retha Welch was raped and murdered in her Newport, Kentucky apartment. (Doc. # 1-1 ¶ 22). Mr. Virgil was arrested shortly thereafter, and in September 1988, a Kentucky jury convicted him of Ms. Welch's murder; Mr. Virgil was subsequently sentenced to seventy years in prison. Id. ¶ 82. On December 18, 2015—over 28 years later—after DNA testing suggested Mr. Virgil's innocence, he was released from custody and granted a new trial. Id. ¶¶ 28, 84. On January 5, 2017, when the case against Mr. Virgil was re-presented to a Kentucky grand jury, a "no true bill of indictment" was returned; the charges against Mr. Virgil were dismissed, resulting in his exoneration. Id. ¶ 85.
On December 16, 2016, Mr. Virgil filed a civil-rights suit against the Newport Defendants alleging, inter alia , claims pursuant to 42 U.S.C. § 1983. See William Virgil v. City of Newport, et al. , No. 2:16-cv-224 (E.D. Ky.) (the "Virgil Suit"). Therein, Mr. Virgil claims that during their investigation of Ms. Welch's murder and Mr. Virgil's subsequent trial, the Newport Defendants withheld exculpatory evidence and even fabricated evidence by coercing Joe Womack—an inmate at the jail where Mr. Virgil was detained—to falsely testify that he heard Mr. Virgil confess to the crime. Id. ¶¶ 26-77. Mr. Virgil does not allege, however, that the Newport Defendants took any actions that contributed to his injuries between July 1, 2007, through July 1, 2013, when Plaintiffs' insurance policies were in effect. See generally id. Furthermore, aside from continued incarceration, Mr. Virgil does not allege any distinct injuries during this time period. See id. As to damages, Mr. Virgil alleges that, as a result of the Newport Defendants' alleged civil-rights violations, he "suffered tremendous damage, including but not limited to physical harm, mental suffering, and loss of a normal life." Id. ¶ 106. Mr. Virgil seeks compensatory damages, attorneys' fees, costs, and punitive damages against each of the individual Defendants in the underlying Virgil Suit. Id. ¶ 171.
In the Virgil Suit, Mr. Virgil's theories of liability pursuant to 42 U.S.C. § 1983 include (1) violation of his due-process rights by Defendants' fabrication of evidence and withholding of exculpatory evidence; (2) malicious prosecution; (3) failure to intervene to prevent the denial of his rights and prevent his injuries; (4) Monell liability against the City of Newport for an alleged policy and practice of failing to train, supervise, and discipline officers; and (5) civil conspiracy to "frame" Mr. Virgil for the alleged crime in order to deprive him of his constitutional rights. See (Doc. # 1-1 ¶¶ 107-115, 116-125, 126-130, 138-142, 143-49, 150-54). Mr. Virgil is also pursuing state-law claims of, inter alia , negligent supervision and negligence. Id. ¶¶ 160-171. The Court has dismissed Mr. Virgil's supervisory-liability claim against Defendants Fromme and Sears, as well as his intentional-infliction-of-emotional-distress claim against all of the Newport Defendants and his respondeat-superior theory of negligence against the City of Newport. See Virgil v. City of Newport , No. 2:16-cv-224-DLB-CJS, 2018 WL 344986, 2018 U.S. Dist. LEXIS 3708 (E.D. Ky. Jan. 9, 2018).
B. The Insurance Policies
The Plaintiffs provided six different insurance policies—providing law-enforcement-liability coverage, public-entity-management-liability coverage, and general-liability coverage—to Defendant City of Newport which, all together, covered the period of July 1, 2007, through July 1, 2013. See (Docs. # 67-1 through 67-20) (joint exhibits). First, Plaintiff St. Paul issued an insurance policy to the City of Newport for the first three years of coverage: (1) July 1, 2007 to July 1, 2008; (2) July 1, 2008 to July 1, 2009; and (3) July 1, 2009 to July 1, 2010 (collectively, the "St. Paul policies"). (Doc. # 67 at 3-4). Each of the St. Paul policies were assigned Policy Number GP09313991. Id. Plaintiff Phoenix issued an insurance policy to the City of Newport for the next two policy periods: (1) July 1, 2010 to July 1, 2011, and (2) July 1, 2011 to July 1, 2012 (collectively, the "Phoenix policies"). Id. at 4-5. Each of the Phoenix policies were assigned Policy Number GP09315190. Id. Finally, Plaintiff Travelers issued an insurance policy to the City of Newport for the policy period of July 1, 2012, to July 1, 2013, with the policy number ZLP-14S03988-12-PB (the "Travelers policy"). Id. at 5-6. For clarity, the at-issue policies have been summarized in the following chart:
| # | Issuing Insurer | Policy Term | Policy No. |
|---|---|---|---|
| 1 | St. Paul | July 1, 2007 – July 1, 2008 | GP09313991 |
| St. Paul | July 1, 2008 – July 1, 2009 | GP09313991 | |
| St. Paul | July 1, 2009 – July 1, 2010 | GP09313991 | |
| Phoenix | July 1, 2010 – July 1, 2011 | GP09315190 | |
| Phoenix | July 1, 2011 – July 1, 2012 | GP09315190 | |
| Travelers | July 1, 2012 – July 1, 2013 | ZLP-14S03988-12-PB |
The St. Paul policies are essentially identical to one another. The Phoenix and Travelers policies are also practically identical to each other except for a liberalization agreement applied to the first Phoenix policy, discussed infra. St. Paul, Phoenix, and Travelers are all presently owned, through intervening subsidiary companies, by The Travelers Companies, Inc.; the same underwriting department handled the underwriting for all of the policies in question. (Doc. # 68-1 at 5).
1. Public-Entity-Management Liability Coverage
The St. Paul policies provided public-entity-management liability coverage (PEML) which covers "damages for [a] covered loss that results from the conduct of duties by or for a public entity; and is caused by a wrongful act first committed while this agreement is in effect." (Doc. # 68-2 at 3). The Phoenix and Travelers policies contained similarly-worded PEML coverage. See (Docs. # 1 ¶¶ 58-66, 1-4 at 7-17, 1-8 at 50-59, 1-12 at 40-50, 1-15 at 48-59, 1-17 at 33-44, and 1-19 at 30-41). The Newport Defendants do not dispute Plaintiffs' claim in Count III of the Complaint that there is no PEML coverage applicable to the Virgil Suit. See (Docs. # 1 ¶¶ 58-66, 68 at 17, 71-1 at 6 n.1, and 76 at 3).
2. Law-Enforcement-Liability Coverage
The St. Paul policies provided law-enforcement-liability coverage (LEL), which covers the following:
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 activities or operations.
(Doc. # 67-5 at 2). Injury or damages includes "bodily injury, personal injury, or property damage." Id. The policies define "bodily injury" as "harm to the health of other persons," including "physical harm, sickness, or disease, mental anguish, distress, injury, or illness, emotional distress, and humiliation." Id. The policies define "personal injury" as injury other than bodily injury caused by a defined list of wrongful acts, including false arrest, detention, imprisonment, and malicious prosecution. Id.
The Phoenix and Travelers policies also included LEL coverage. The policies are functionally the same as the St. Paul policies except for one significant difference. The Phoenix and Travelers policies each have a "deemer clause" which states that all bodily injury or personal injury caused by the same wrongful act or related wrongful acts will be deemed to occur when the first part of such bodily injury or personal injury occurs. (Doc. # 67-10 at 2). Thus, if a bodily or personal injury began before the applicable policy period, then all bodily or personal injury caused by the same wrongful or related acts fall outside the scope of coverage. See id. The absence of a similar "deemer clause" in the St. Paul policies, therefore, is central to the parties' dispute.
3. General-Liability Coverage
In addition to law-enforcement liability coverage, each of the six policies provided some form of general-liability coverage. The St. Paul policies include "Public Entity General Liability Protection Coverage," which covers "damages from covered bodily injury or property damage that happens while this agreement is in effect and is caused by an event." (Doc. # 67 at 3). An exclusion, however, provides that there is no general-liability coverage for injury or damage caused by law-enforcement operations, "meaning any of the official activities or operations of your police department, sheriff agency, or other public safety organization which enforces the law and protects persons or property." Id. at 12.
For clarity and ease of reference, the Court's use of the term "General-Liability Coverage" herein extends to both "Public Entity General Liability Protection Coverage" under the St. Paul policies as well as "Commercial General Liability Coverage" under the Phoenix and Travelers policies.
Similarly, the Phoenix and Travelers policies provided "Commercial General Liability Coverage" that insures against bodily injury or property damage caused by an occurrence, meaning "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (Doc. # 67-8 at 2, 15). This coverage is functionally the same as the general-liability coverage in the St. Paul policies because it extends to damages from personal injury, but excludes personal injuries caused by law-enforcement operations. (Doc. # 67-9 at 2).
4. Phoenix Liberalization Agreement
Finally, the Phoenix policy for the policy period of July 1, 2010 to July 1, 2011 contained a "liberalization" agreement. (Doc. # 67-14). This clause stems from the merger of Travelers with St. Paul. See (Doc. # 71-1 at 7) (citing Doc. # 67-14). In 2010, as part of the post-merger transition, Travelers transferred the City of Newport's policies to Phoenix, another Travelers entity. Id. To smooth this transition, Travelers agreed to "adjust any claims under your new [Phoenix] policy based upon the terms and conditions of either your expiring St. Paul policy or your first new [Phoenix] policy, whichever is broader," subject to a few inapplicable exceptions. (Doc. # 67-14 at 2-3) ("liberalization agreement"). Thus, if the St. Paul policies were broader than the subsequent Phoenix policy, the broader St. Paul coverage would extend to a fourth year of coverage under the first Phoenix policy that covered the policy period of July 1, 2010 through July 1, 2011. See (Doc. # 71-1 at 8).
C. Procedural History
The Plaintiff-Insurers initiated this declaratory-judgment action on June 30, 2017—approximately six months after the Virgil Suit was filed—seeking a declaration that they have no coverage obligation or duty to defend under any of the six policies at issue. (Doc. # 1). On August 28, 2017, the Newport Defendants filed an Answer to the Complaint with an attendant Counterclaim for declaratory judgment, asking the Court to declare that there is coverage for the claims asserted in the Virgil Suit and a duty to defend. (Doc. # 28). Defendant Virgil filed his Answer on September 18, 2017, and Plaintiffs filed an Answer to the Newport Defendants' Counterclaim on October 6, 2017. (Docs. # 36 and 39).
Following the close of fact discovery, the Newport Defendants and Plaintiffs filed cross-dispositive motions on the issue of whether the Plaintiffs' respective insurance policies provide coverage in the defense of the Virgil Suit. (Docs. # 68 and 71). Both Motions are now fully briefed and ripe for review. (Docs. # 68, 71, 75, 76, 77, 78, 79, and 80). Defendant Virgil has not joined in either Motion.
III. ANALYSIS
A. Standard of Review
Summary judgment is proper when "the movant shows that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The Court may not grant summary judgment if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The Court "views the evidence, all facts, and any inferences that may be drawn from the facts in the light most favorable to the non-moving party." Pure Tech Sys., Inc. v. Mt. Hawley Ins. Co. , 95 F. App'x 132, 135 (6th Cir. 2004) (citing Skousen v. Brighton High Sch. , 305 F.3d 520, 526 (6th Cir. 2002) ). See also Matsushita Elec. Indus. Co. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Once the movant has satisfied its burden, the non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita , 475 U.S. at 586, 106 S.Ct. 1348 ; rather, it must produce specific facts showing that a genuine issue remains. Plant v. Morton Int'l., Inc. , 212 F.3d 929, 934 (6th Cir. 2000). "[W]here, as here, the parties filed cross-motions for summary judgment, ‘the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.’ " EMW Women's Surgical Ctr., P.S.C. v. Beshear , 920 F.3d 421, 425 (6th Cir. 2019) (quoting McKay v. Federspiel , 823 F.3d 862, 866 (6th Cir. 2016) ). Accord Beck v. City of Cleveland , 390 F.3d 912, 917 (6th Cir. 2004).
The parties do not dispute that Kentucky law applies to the coverage dispute before the Court. (Docs. # 71-1 at 17-19 and 76 at 4). Under Kentucky law, "[i]t is well settled that the proper interpretation of insurance contracts generally is a matter of law to be decided by a court." Thiele v. Ky. Growers Ins. Co. , 522 S.W.3d 198, 199 (Ky. 2017). See also Kemper Nat'l Ins. Cos. v. Heaven Hill Distilleries, Inc. , 82 S.W.3d 869, 871 (Ky. 2002) ("Interpretation and construction of an insurance contract is a matter of law for the Court."); B.F. Goodrich Co. v. U.S. Filter Corp. , 245 F.3d 587, 595 (6th Cir. 2001) (explaining that, while issues of contractual intent could survive summary judgment on the basis that they are questions of fact, "disputed issues of contractual interpretation can be resolved at summary judgment on the basis that they are questions of law"). Further, "genuine issues of material fact do not exist simply because opposing litigants argue for different interpretations of the same contractual provision." Goodrich , 245 F.3d at 594-95 (citing Tenn. Consol. Coal Co. v. United Mine Workers of Am. , 416 F.2d 1192, 1199 (6th Cir. 1969) ); Hanover Ins. Co. v. Am. Eng'g Co. , 33 F.3d 727, 730 (6th Cir. 1994) (stating that, under Kentucky law, "the construction of insurance contract provisions comprise questions of law for the court, unless disputed facts are involved").
As the Court has subject-matter jurisdiction over this action based upon diversity of citizenship, Kentucky substantive law applies. Myers v. AgriLogic Ins. Servs., LLC , 694 F. App'x 373, 376 (6th Cir. 2017) (citing Garden City Osteopathic Hosp. v. HBE Corp. , 55 F.3d 1126, 1130 (6th Cir. 1995) ).
When interpreting a contract, the Court starts with the plain meaning. The Point/Arc of N. Ky., Inc. v. Phila. Indem. Ins. Co. , 154 F. Supp. 3d 503, 510 (E.D. Ky. 2015). "[W]ords which have no technical meaning in law, must be interpreted in light of the usage and understanding of the common man," and reasonable, unambiguous terms will be enforced as written—particularly where the contract is between sophisticated parties. Bituminous Cas. Corp. v. Kenway Contracting, Inc. , 240 S.W.3d 633, 638 (Ky. 2007) ; The Point/Arc , 154 F. Supp. 3d at 510 (noting courts' respect for "the freedom of contract between two sophisticated parties"). Ambiguous terms, however, are interpreted strictly in favor of the insured. Tower Ins. Co. of N.Y.C. v. Horn , 472 S.W.3d 172, 174 (Ky. 2015). "The rule of strict construction against an insurance company certainly does not mean that every doubt must be resolved against it." St. Paul Fire & Marine Ins. Co. v. Powell-Walton-Milward, Inc. , 870 S.W.2d 223, 226 (Ky. 1994). Rather, "the policy must receive a reasonable interpretation consistent with the parties' object and intent or narrowly expressed in the plain meaning and/or language of the contract." Id.
B. LEL Coverage
The issue at the heart of the parties' extensively-briefed LEL-coverage dispute is whether the Virgil Suit concerns "injury" or "damage" that "happened" between July 1, 2007, and July 1, 2010—the policy period covered by the St. Paul policies. See (Docs. # 67-5, 68 at 9, and 71-1 at 5). For the reasons stated herein, the Court finds that Mr. Virgil's alleged injuries occurred outside of this policy period and therefore coverage was not triggered under the policies in question.
Of the six insurance policies at issue in this case, the parties agree at the outset that three of them—the two Phoenix policies and the Travelers policy—do not provide LEL coverage in this context. (Docs. # 68 at 4 and 76 at 3). But the reason the parties agree that these three policies do not provide LEL coverage is important to understanding the central coverage issue as to the remaining three St. Paul policies—whether coverage was triggered by an occurrence during the policy period.
There is one caveat to the Newport Defendants' concession on this issue. Because of the "liberalization agreement" provided by the insurer after merging with St. Paul, the Newport Defendants argue that the post-merger Phoenix policy covering the period of July 1, 2010, through July 1, 2011 should provide coverage to the same extent that the St. Paul policies do so. See (Docs. # 68 at 40 and 76 at 3, 3 n.1). See also (Doc. # 67-14 at 2) (agreeing to "adjust any claims under your new ... policy based upon the terms and conditions of either your expiring St. Paul policy or your first new policy, whichever is broader"). Coverage under this Phoenix policy is therefore contingent upon a finding that there is LEL coverage under the St. Paul policies. As the Court finds that there is no LEL coverage under the St. Paul policies, see infra , the liberalization-agreement issue is moot .
"There are two basic types of liability insurance policies: claims-made and occurrence." 7 Couch on Ins. § 102:22. Generally, a claims-made policy "provides coverage for claims made during the policy period regardless of when the events out of which the claim arose occurred." Id. "In contrast, an occurrence policy provides coverage for all ‘occurrences’ which take place during a policy period." Id. Thus, the main difference is the event by which coverage is triggered during the policy period.
All six of the policies in this case are "occurrence" policies, requiring that an event "occur" during the policy period in order to trigger coverage. See (Docs. # 71-1 at 21 and 76 at 2). As the Newport Defendants point out, however, unlike "traditional ‘occurrence’ policies ... the occurrence which triggers coverage is the claimant's injury, rather than the policyholder's wrongful act." (Docs. # 76 at 2, 12-14, 22 and 78 at 4). See also (Doc. # 71-1 at 21). Specifically, the policy language states:
As the Newport Defendants note, "the term ‘trigger’ (or ‘coverage trigger’) may not appear in [the St. Paul] policies but [it] is a term of art referring to the event which must happen during the policy period for the potential of coverage to arise." (Doc. # 68 at 22) (citing EnergyNorth Nat. Gas, Inc. v. Underwriters at Lloyd's , 150 N.H. 828, 848 A.2d 715, 718 (2004) ). "What triggers coverage is determined by the language used in the policy and the relevant state law." Id.
Law enforcement liability. We'll pay amounts any protected person is legally required to pay as damages for covered injury or damage that ...
• happens while this agreement is in effect; and
• is caused by a wrongful act that is committed while conducting law enforcement activities or operations.
(Doc. # 67-5 at 2). Therefore, pursuant to this policy language, determining whether there was an "occurrence" triggering LEL coverage requires assessing whether there is "injury or damage that ... happen[ed]" during the policy period. Id. Deciding when "injury or damage" occurs (or "happens") is simple for finite events such as fires. See Acuity Ins. Co. v. Higdon's Sheet Metal & Supply Co. , No. 3:06-CV-162, 2007 WL 1034986, at *3 (W.D. Ky. Apr. 3, 2007) (determining when property damage from fire "occurred" in the trigger-of-coverage context). But some circumstances are more complex in nature—pollution or chemical exposure, for example, can present latent, repeat, or "continuous" injuries. See (Doc. # 75 at 13) (citing Keene Corp. v. Ins. Co. of N. Am. , 667 F.2d 1034, 1040 (D.C. Cir. 1981) (deciding whether "injury" occurred during policy period in the context of the "complexity entailed by asbestos-related diseases")). See also (Doc. # 71-1 at 27) (citing City of Lee's Summit v. Mo. Pub. Entity Risk Mgmt. , 390 S.W.3d 214, 221-22 (Mo. Ct. App. 2012) (discussing asbestosis and other latent or gradual-injury cases)).
Malicious prosecution falls within the scope of such a "wrongful act" under the policy. Id. Plaintiffs argue that the "same rubric" that applies to malicious-prosecution claims applies to each of the claims in the Virgil Suit because "a malicious prosecution claim is analogous to a claim for constitutional injuries resulting from wrongful arrest, conviction and incarceration." (Doc. # 71-1 at 25-26) (citing St. Paul v. City of Waukegan , 415 Ill.Dec. 619, 82 N.E.3d 823, 834 (Ill. App. Ct. 2017) ). The Newport Defendants similarly note in their dispositive motion that "[t]he common-law cause of action for malicious prosecution provides the closest analogy to claims of the type considered here." (Doc. # 68 at 27) (citations omitted). Accordingly, it appears the parties do not dispute that the claims in the Virgil Suit fall within the scope of the policy language requiring an injury be "caused by a wrongful act that is committed while conducting law enforcement activities or operations." (Doc. # 67-5 at 2). Thus, the only issue is whether Mr. Virgil's alleged injuries caused by these acts "happen[ed] while the agreement [wa]s in effect." Id.
Civil-rights violations such as those alleged in the Virgil Suit likewise present a more complex question as to when injuries occur. Often in these cases, the wrongful prosecution, conviction, and attendant civil-rights violations which cause the injuries happen years or even decades before a defendant's conviction is overturned and the defendant is finally released from imprisonment. Courts outside of the Sixth Circuit have had to grapple with the "occurrence" question in this civil-rights context and determine whether injuries stemming from a decades-old conviction "occurred" during the relevant policy period such that coverage is triggered. See, e.g. , TIG Ins. Co. v. City of Elkhart , 122 F. Supp. 3d 795, 807-08 (N.D. Ind. 2015) ; St. Paul Fire & Marine Ins. Co. v. City of Waukegan , 415 Ill.Dec. 619, 82 N.E.3d 823, 834, 838 (Ill. App. Ct. 2017) ; St. Paul Fire & Marine Ins. Co. v. City of Zion , 385 Ill.Dec. 193, 18 N.E.3d 193, 199-200 (Ill. App. Ct. 2014). The question is often compounded because, while the policy period is usually confined to a period of time far removed from the conviction, imprisonment often continues from the time of conviction through some portion of the policy period. See id.
Against this backdrop, it becomes clear why the Newport Defendants concede there is no LEL coverage under either the Phoenix policies or the Travelers policy. These three policies each contain a "deemer clause," which provides that any injury caused by the same wrongful act (or related wrongful acts) is "deemed" for insurance purposes to have occurred when the first part of the injury occurred. See, e.g. , (Doc. # 67-10 at 2). Pursuant to this provision, it is clear that the injuries alleged in the Virgil Suit "occurred" in the 1980s when Mr. Virgil was arrested, prosecuted, and convicted—well before the applicable policy periods from 2010 through 2013. Thus, it is undisputed that neither the Phoenix policies nor the Travelers policy provide LEL coverage in this case.
Determining when the injuries "occurred" under the St. Paul policies covering the period between July 1, 2007 and July 1, 2010, is more complicated, however, because they do not contain such a "deemer clause." See (Doc. # 67-5 at 2). The Newport Defendants emphasize that coverage is triggered by the occurrence of the injury , as opposed to the wrongful act , under the plain language of the St. Paul policies. See (Doc. # 68). While the Virgil Suit alleges that Mr. Virgil's wrongful arrest, prosecution, conviction and incarceration—and the attendant injuries and damage that occurred as a result—happened in the 1980s, Defendants argue that coverage was nonetheless triggered during the policy period because the Virgil Suit contains allegations of incarceration and attendant dignitary harms that continued through the relevant policy period. See (Doc. # 76 at 17) (citing Newman v. Metrish , 300 F. App'x 342, 344 (6th Cir. 2008) (characterizing ongoing imprisonment in violation of constitutional rights as a "continuing injury"); Burdine v. Johnson , 87 F. Supp. 2d 711, 717 (S.D. Tex. 2000) (stating that a person who is wrongfully imprisoned in violation of his constitutional rights suffers "harm each day he is imprisoned")).
Defendants appear to argue that the presence of the deemer clause in later policies constitutes a per se ambiguity in the absence of the deemer clause in the St. Paul policies and therefore the policy should be construed against the insurer. (Docs. # 68 at 30-33, 37 and 79 at 4). Defendants fail to point to any Kentucky authority to support a finding that an insurer's subsequent bargaining for more specific language automatically renders previous, less specific policy language ambiguous, and numerous courts interpreting the same policy language have found that it is not ambiguous. See discussion , infra.
Because Mr. Virgil alleges damages—in the form of wrongful incarceration—that extended through the applicable policy period, Defendants assert that this continuing injury could trigger coverage at any time. (Doc. # 68 at 23) (citing Doc. # 67-5 at 1). To support their claim, the Newport Defendants rely upon cases from other jurisdictions. See (Doc. # 68 at 23-24) (citing Montrose Chem. Corp. v. Admiral Ins. Co. , 10 Cal.4th 645, 42 Cal.Rptr.2d 324, 913 P.2d 878 (1995) (discussing continuous-injury trigger in the context of an insurance claim for third-party injuries caused by hazardous-waste disposal); Nat'l Cas. Ins. Co. v. City of Mt. Vernon , 128 A.D.2d 332, 515 N.Y.S.2d 267 (1987) (discussing "continuous or repeated exposure to conditions" in the context of false-imprisonment claim)). And, Defendants argue, the Virgil Suit does claim that injuries "happened" during the applicable policy periods. (Docs. # 68 at 19-29 and 76 at 12). Not only is "post-conviction incarceration of constitutional rights ... an ongoing injury," but Mr. "Virgil alleges he suffered physical, mental, and emotional pain and suffering over the 28 years he spent in prison" from approximately 1988 to 2015—some of which was during the applicable policy period of July 1, 2007 through July 1, 2013. (Docs. # 68 at 27 and 78 at 6, 14). In support of their argument that this is sufficient to trigger LEL coverage, the Newport Defendants rely heavily on a case from the U.S. District Court for the Southern District of Mississippi. See (Docs. # 78 at 2-3, 9 and 79) (citing Travelers Indem. Co. v. Forrest Cty. , 206 F. Supp. 3d 1216, 1224 (S.D. Miss. 2016), aff'd sub nom. , Travelers Indem. Co. v. Mitchell , 925 F.3d 236 (5th Cir. 2019) ).
Plaintiffs point out that the Forrest County case relied upon by Defendants is not only distinguishable, but was appealed and taken up by the Fifth Circuit Court of Appeals following the parties' briefing on their cross-dispositive motions. (Doc. # 77 at 6). See Mitchell , 925 F.3d 236 (5th Cir. 2019). On July 8, 2019, the Newport Defendants filed a Notice of New Additional Persuasive Authority summarizing Mitchell and arguing that the Fifth Circuit's decision did not detract from Defendants' reliance on Forrest County or, alternatively, did so on distinguishable grounds. See (Doc. # 79). Plaintiffs filed a Response brief on July 23, 2019, wherein they argue that Mitchell is distinguishable and contrary to the majority view. (Doc. # 80). The Court has considered Mitchell and the parties' submissions on this issue (Docs. # 79 and 80) in its adjudication of the pending motions. See discussion, infra.
Plaintiff-Insurers, on the other hand, assert that the majority of jurisdictions hold that injury stemming from a claim of malicious prosecution happens —thereby "triggering" policy coverage—when a person is wrongfully charged and incarcerated. (Docs. # 71-1 at 22 and 75 at 2) (both citing Wallace v. Kato , 549 U.S. 384, 390, 127 S.Ct. 1091, 166 L.Ed.2d 973 (2007) ). While Mr. Virgil's incarceration may have extended many years up through the applicable policy period, Plaintiffs argue that such unlawful detention is simply a continuation of damages that were brought about by the malicious prosecution and attendant civil-rights violations. (Doc. # 71-1 at 22-25) (collecting cases from other jurisdictions finding that malicious-prosecution claims trigger coverage when prosecution is initiated). See also (Doc. # 75 at 2-12) (collecting cases from other jurisdictions rejecting the multiple-trigger and continuous-trigger theories).
Indeed, both parties rely exclusively on persuasive authority in support of their central LEL-coverage arguments. This is because there is a dearth of controlling authority. Neither the Kentucky courts nor the courts within the Sixth Circuit have considered when injuries "happen" or "occur" in this context. Thus, the Court here deals with an issue of first impression under Kentucky law. "Although some states have adopted a coverage trigger theory to establish the date of loss for determining when coverage is triggered in cases such as this [where coverage was triggered by "damage" occurring during the policy period], Kentucky has not done so." Acuity , 2007 WL 1034986, at *3 (citing Eckstein v. Cincinnati Ins. Co. , 2005 WL 3050469, at *2 (W.D. Ky. 2005) ) (refusing to adopt either the "manifestation" theory or the "continuous trigger" theory to latent damage in the absence of guidance from the Kentucky Supreme Court)). "Instead, coverage is determined by examining the terms of the policies at issue." Id.
When a federal court must apply substantive state law concerning an issue of first impression, or an issue which that state's courts have not comprehensively addressed or definitively ruled on, it is the Court's "duty ... to decide unsettled issues of state law as a Kentucky court would decide them." Kelly v. McFarland , 243 F. Supp.2d 715, 717 (E.D. Ky. 2001) (citing Overstreet v. Norden Labs., Inc. , 669 F.2d 1286, 1289-90 (6th Cir. 1982) ). In doing so, the Court "must predict" how the state courts would rule. Id. ; see also Swanson v. Wilson , 423 F. App'x 587, 594 (6th Cir. 2011) (noting that in "highly uncertain area[s] of state law," federal courts must "make an educated ‘Erie guess’ ") (quoting Combs v. Int'l Ins. Co. , 354 F.3d 568, 577 (6th Cir. 2004) ).
Terms used within insurance contracts "should be given their ordinary meaning as persons with the ordinary and usual understanding would construe them." Sutton , 971 S.W.2d at 808. The policy term at issue requires that "injury or damage ... happens while this agreement is in effect," which was between July 1, 2007 and July 1, 2010. (Doc. # 67-5 at 2) (emphasis added). "Kentucky courts often refer to dictionaries in order to determine the ordinary meaning of undefined contractual terms." Encompass Indem. Co. v. Halfhill , No. 5:12-CV-117, 2013 WL 6800682, at *4 (W.D. Ky. Dec. 20, 2013) (citations omitted). See also Thiele , 522 S.W.3d at 199. The Oxford English Dictionary explains that to "happen" means "to take place, to come to pass, occur (typically expressing simple occurrence, with little or no implication of causality); to ensue as an effect or result." Happen , Oxford English Dictionary Online (3d ed. 2013).
Affording this term its ordinary meaning as persons with ordinary and usual understanding would, Encompass , 2013 WL 6800682, at *4, it is clear that Mr. Virgil's injuries as alleged in the Virgil Suit happened —came to pass, occurred, and resulted—when the Newport Defendants caused his wrongful arrest, prosecution, conviction, and sentencing to 70 years in prison in 1987 and 1988. See (Doc. # 1-1 ¶¶ 11-82). The Court recognizes that every day he spent in prison, Mr. Virgil suffered from injury; obviously, wrongful imprisonment and the resultant physical and dignitary harms that accompany such confinement represents a continuous and ongoing injury. Newman , 300 F. App'x at 344. However, the weight of persuasive case law indicates that coverage is not invoked in this context simply because the same injuries continued to be suffered from the 1980s and into the policy period. Neither the plain language of the policy nor the law of Kentucky supports such a reading. The policy language does not merely require that injuries "exist" or "are present"; injuries must happen during the policy period; here, Mr. Virgil's injuries happened decades earlier and persisted until Mr. Virgil's release from prison and exoneration. This conclusion is informed and supported by courts which have examined the question of when an injury for malicious prosecution and related civil-rights claims occurred in this context. See, e.g. , Sarsfield v. Great Am. Ins. Co. of N.Y. , 833 F. Supp. 2d 125, 130-32 (D. Mass. 2008) (collecting cases and noting that "a majority of courts have held that the injury, for insurance purposes, occurs when the underlying criminal charges are filed"), aff'd , 335 F. App'x 63 (1st Cir. 2009) ; Coregis Ins. Co. v. City of Harrisburg , No. 1:03-CV-920, 2006 WL 860710, at *1 (M.D. Pa. Mar. 30, 2006).
In Coregis , the district court found that an insurer was not obligated to defend or indemnify Dauphin County or the City of Harrisburg with respect to an underlying civil-rights action. 2006 WL 860710, at *1. The insurer in Coregis issued policies for the applicable policy periods extending from 1998 through 2001. Id. at *1. The underlying claimant was prosecuted for murder in the 1970s based upon false evidence. Id. The insurer issued an occurrence policy with the familiar language that coverage applied to " ‘bodily injury,’ ... [or] ‘personal injury’ [which] ... occurs during the policy period." Id. at *2. The district court reasoned that, "[n]otwithstanding that Crawford was imprisoned for 28 years ... it is clear that the humiliation, damage to reputation, and other injuries that allegedly resulted from Crawford's prosecution and the attendant constitutional deprivations would have been evident upon his arrest and incarceration in 1974." Id. at *10. Because these injuries were brought about "years prior to any of the insurance policies presently before the Court," coverage did not apply. Id. Moreover, the district court explained that the fact "[t]hat the effects of Crawford's alleged injuries that occurred in the 1970s may have extended into the respective policy periods does not change the Court's analysis." Id. at *11. Without any allegations of injuries during the policy period that were distinct from those that happened in the 1970s, coverage did not apply. Id. at *12.
Indeed, a number of courts in other jurisdictions interpreting precisely the same policy language under similar circumstances have found that continuing injuries do not trigger coverage decades after they occurred. See Chicago Ins. Co. v. City of Council Bluffs , 713 F.3d 963, 970 (8th Cir. 2013) (finding that, with similar injury-based policy language, "for insurance purposes" the claimant's injuries "occurred" at the time of malicious prosecution and did not invoke coverage merely because those same injuries continued through to the relevant policy period). See also City of Waukegan , 415 Ill.Dec. 619, 82 N.E.3d at 834-38 ; City of Elkhart , 122 F. Supp. 3d at 807-08 ; City of Zion , 385 Ill.Dec. 193, 18 N.E.3d at 199-200. And while there is no Kentucky caselaw squarely on point with this majority rule, there is nothing to suggest, let alone allow this Court to predict, that the Supreme Court of Kentucky would part from this majority rule or otherwise deviate from it.
As noted supra , the Newport Defendants rely heavily on Forrest Cty. , 206 F. Supp. 3d 1216, an outlying case identified by Defendants that found there was LEL coverage in this context with identical policy language. In Forrest County , Travelers Indemnity Company ("Travelers") brought a declaratory-judgment action alleging that there was no LEL coverage under the same basic fact pattern. Id. at 1218. In the underlying civil-rights suit, three plaintiffs alleged that law-enforcement officers of the City of Hattiesburg, Mississippi, and Forrest County, Mississippi, coerced false murder confessions, fabricated evidence, ignored potentially exculpatory evidence, and otherwise conspired to prosecute them without probable cause. Id. Plaintiffs were exonerated in 2010 and 2011, after spending approximately thirty years in prison. Id. They brought a variety of claims under, inter alia , 42 U.S.C. § 1983. Id. In the declaratory-judgment action, Travelers argued that there was no LEL coverage under a policy issued by St. Paul for the policy period of 2005 through 2011. Id. at 1221. The policy provided the same language invoking LEL coverage for "injury or damage that ... happens while this agreement is in effect." Id. at 1222. Thus, just as in the instant case, "the occurrence which triggers coverage is the claimant's injury, rather than the policyholder's wrongful act." Id. Applying Mississippi law, the district court found that there was a requisite "injury" that occurred during the policy period because the underlying civil-rights plaintiffs alleged that they "were in prison for a crime they did not commit during the policy period." Id. at 1224-25. Accordingly, the court concluded that LEL coverage was triggered and granted summary judgment in the insured's favor as to the LEL-coverage claim. Id. at 1226-27.
The Fifth Circuit's decision on appeal, however, demonstrates that Forrest County is distinguishable from the instant case because of distinct injuries that happened to the civil-rights plaintiffs during their incarceration. See Travelers Indem. Co. v. Mitchell , 925 F.3d 236 (5th Cir. 2019). On appeal, the Fifth Circuit affirmed the district court's grant of summary judgment in favor of the insured state actors; significantly, however, the reasoning of the Fifth Circuit was more nuanced than that of the lower court. See id. The Fifth Circuit in Mitchell went into much greater detail about the underlying allegations of civil-rights violations and emphasized that after the three men were sentenced and imprisoned,
they were the victims of numerous assaults by other prisoners. Each developed physical injuries and maladies, including Ruffin's infection with syphilis and herpes in 1984-85, and Bivens's contraction of Hepatitis C in 2007.
Id. at 239. The Fifth Circuit continued outlining the specific allegations of post-conviction injuries beyond imprisonment alone, including the following "sampling":
• From 2000 through 2010, Mr. Dixon suffered other ailments which were caused by the conditions of his confinement, including staph infections, chest pains, dizziness, convulsions, blurry vision, infections, hematomas, rashes, coughing up blood, nausea, vomiting, diarrhea, bursitis, urinary tract infections, and suicidal depression.
• Dixon came up for parole in February 2006 and December 2009. When his petitions for early release were denied, Dixon suffered ‘mental anguish, embarrassment, humiliation, and emotional distress.’
• Mr. Bivens ... suffered with sinusitis, high blood pressure and hypertension, dizziness, nausea, chest pains, abnormal heart rhythm, shoulder injuries, and bursitis from 2005 through 2010 resulting from substandard prison conditions.
• In 2007, Mr. Bivens contracted Hepatitis C, which was not properly treated. This hepatitis in turn led to a number of medical problems, including cirrhosis of the liver in 2008 followed by liver cancer.
Id. at 242. These injuries sustained while in prison are important because the Fifth Circuit expressly "agree[d] that Bivens's and Dixon's continued imprisonment, alone, did not trigger coverage. " Id. at 241 (emphasis added). Rather, the civil-rights plaintiffs "allege[d] that Bivens and Dixon suffered numerous, independent harms between 2005 and 2011"—the applicable policy period. Id. at 242. Accordingly, the Fifth Circuit concluded that, "[b]ecause the [underlying civil-rights] complaint alleges several distinct injuries"—distinct from imprisonment alone—that happened "during the policy period," there was a duty to defend under the policy. Id. at 242, 247.
The "independent" harms identified by the Fifth Circuit in Mitchell are not present here. The Virgil Suit alleges that Mr. Virgil suffered damage in the form of incarceration, with resultant physical harm as well as mental and emotional pain and suffering. Id. ¶¶ 104-106. Specifically, the "[d]amages" alleged in Mr. Virgil's Second Amended Complaint are as follows:
• William Virgil spent more than 28 years incarcerated for crimes he did not commit. He must now attempt to make a life for himself without the benefit of nearly a decade of life experiences, which normally equip adults for that task.
• Additionally, the emotional pain and suffering caused by losing those years has been substantial. During his incarceration, he was stripped of the various pleasures of basic human experience, from the simplest to the most important, which all free people enjoy as a matter of right. Mr. Virgil missed out on the ability to share holidays, births, funerals, and other life events with loved ones, to raise his five children, the opportunity to fall in love, to marry, and the fundamental freedom to live one's life as an autonomous human being.
• As a result of the foregoing, Mr. Virgil has suffered tremendous damage, including but not limited to physical harm, mental suffering, and loss of a normal life, all proximately caused by Defendants' misconduct.
(Doc. # 1-1 ¶¶ 104-106). Based upon the language of the Second Amended Complaint it is clear that Mr. Virgil's injuries extend from the time of his arrest, prosecution, and conviction in 1987 and 1988. Mr. Virgil does not allege any specific injury or damage that happened during the policy period that was distinct from the injuries brought about in 1987 and 1988; only, implicitly, the damages that flowed from his continued wrongful incarceration that came to pass as a result of the malicious prosecution. These same damages continued through Mr. Virgil's 28 years of incarceration through the relevant July 1, 2007 through July 1, 2013 policy periods until he was released in 2015 and exonerated in 2017. See id. ¶¶ 83-85, 104-106.
Thus, based upon the Court's review of the allegations in the Virgil Suit, it is apparent that Mr. Virgil's injuries "happened," thereby invoking coverage, in the 1980s—long before the relevant policy period. See (Doc. # 1-1). Although his injuries persisted until his release from prison, case law is fairly consistent in holding that in this context continued incarceration alone is insufficient to trigger coverage under a policy period that began after the wrongful conviction. Mitchell , 925 F.3d at 241-42. See also City of Waukegan , 415 Ill.Dec. 619, 82 N.E.3d at 836 ; City of Zion , 385 Ill.Dec. 193, 18 N.E.3d at 200 ; Sarsfield , 833 F. Supp. 2d at 130. Without more, there is nothing to show that any distinct injury or damage allegedly occurred during the policy period. See id. Therefore, the Court finds that summary judgment in favor of Plaintiffs is appropriate as to LEL coverage.
C. PEML Coverage
Unlike LEL coverage, the plain terms of the policy language with respect to PEML coverage required that the wrongful act , rather than the resultant injury , be committed during the policy period. See (Docs. # 1 ¶¶ 58-66, 1-4 at 7-17, 1-8 at 50-59, 1-12 at 40-50, 1-15 at 48-59, 1-17 at 33-44, and 1-19 at 30-41). See also (Doc. # 68-2 at 3). The Newport Defendants do not dispute Plaintiffs' claim in Count III of the Complaint that there is no PEML coverage applicable to the Virgil Suit, because it is undisputed that the Defendants' alleged wrongful acts occurred in the 1980s, well before the applicable policy periods. See (Docs. # 1 ¶¶ 58-66, 68 at 17, 71-1 at 6 n.1, and 76 at 3). Accordingly, summary judgment in favor of Plaintiffs is appropriate as to PEML coverage.
D. General-Liability Coverage
The parties also addressed the issue of timing with respect to general-liability coverage, because all of the at-issue policies contained language requiring that the injury happen during the policy period. (Doc. # 71-1 at 20). See (Docs. # 67-3 at 3 and 67-8 at 2, 6, 13). The Newport Defendants argue that the Virgil Suit alleges Mr. Virgil suffered "bodily injury" within the meaning of the general-liability coverage by virtue of his incarceration during the policy period. (Docs. # 76 at 4 and 78 at 13-14). This argument fails for the same reasons set forth in the Court's discussion of LEL coverage, supra.
In addition to repeating the timing issue at the heart of the LEL-coverage dispute, the parties further dispute whether a policy exclusion for "law enforcement activities and operations" barred general-liability coverage. Plaintiffs argue that policy exclusions bar this type of coverage under each of the at-issue policies because the conduct at issue in the Virgil Suit constituted excluded "law enforcement activities and operations." (Doc. # 71-1 at 20-21). See (Docs. # 67-3 at 21 and 67-9). Under Plaintiffs' theory, this type of excluded law-enforcement conduct does not fall within the scope of general-liability coverage, "because there is other [type of] coverage – the LEL coverage – which could apply to Virgil's negligent-supervision claims." (Doc. # 71-1 at 21). See also (Doc. # 77 at 3).
The Newport Defendants concede for the most part that there is no general-liability coverage—with the exception, however, of the negligent-supervision claims set forth in the Virgil Suit. (Doc. # 68 at 5). Defendants claim that the "Law Enforcement Activities or Operations exclusion" does not apply to Mr. Virgil's negligent-supervision claim because "negligent supervision would fall outside the scope of ... [the] definition of law enforcement activities and operations." (Docs. # 68 at 47, 51 and 76 at 4). In addition to their argument that the exclusion does not apply, the Newport Defendants assert that the exclusion is ambiguous and therefore should be construed against the insurer. (Doc. # 78 at 14-15) (citing Nationwide Mut. Ins. Co. v. Hatfield , 122 S.W.3d 36, 39 (Ky. 2003) ). See also (Doc. # 68 at 33) (citing St. Paul Fire & Marine Ins. Co. v. Powell-Walton-Milward, Inc. , 870 S.W.2d 223, 227 (Ky. 1994) ).
All six of the policies essentially define "Law Enforcement Activities or Operations" as "any of the official activities or operations of your police department, sheriff agency, or other public safety organization which enforces the law and protects persons or property." Id. (citing Docs. # 67-3 at 20 and 67-9). The Newport Defendants argue that, "[w]hile [Mr.] Virgil's claims arising from the investigation and prosecution of the crimes with which he was charged generally involve ‘Law Enforcement Activities or Operations,’ [Mr.] Virgil's negligent supervision claim reveals a latent ambiguity." (Doc. # 68 at 51). Specifically, Defendants note that the term "Law Enforcement Activities or Operations" is "left undefined, and its outer boundaries are not clear." Id. at 52. In support of Defendants' argument that the term is ambiguous, they point to a 1998 case applying North Carolina law. Id. (citing Houpe v. City of Statesville , 128 N.C.App. 334, 497 S.E.2d 82, 92 (1998) (finding exclusion for "claims arising out of operational law enforcement functions and activities" to be ambiguous as applied to a claim of negligent supervision)).
The Court finds that the negligent supervision of police officers falls within the law-enforcement-operations exclusion. The Newport Defendants have not supplied any controlling authority to support their position, and the Court is not persuaded by Defendants' reliance upon the North Carolina authority to show that the term "Law Enforcement Activities or Operations" is either ambiguous or outside the scope of Mr. Virgil's allegations of negligent supervision. "The mere fact that [parties] attempt to muddy the water and create some question of interpretation does not necessarily create an ambiguity." Sutton v. Shelter Mut. Ins. Co. , 971 S.W.2d 807, 808 (Ky. Ct. App. 1997). Terms used within insurance contracts "should be given their ordinary meaning as persons with the ordinary and usual understanding would construe them." Id. (citing City of Louisville v. McDonald , 819 S.W.2d 319, 320 (Ky. App. 1991) ). "[C]ourts should not make a different insurance contract for the parties by enlarging the risk contrary to the natural and obvious meaning of the existing contract." Sutton , 971 S.W.2d at 809 (citing Pierce v. West Am. Ins. Co. , 655 S.W.2d 34, 36 (Ky. Ct. App. 1983) ). Here, the exclusion expressly relates to "any of the official activities or operations of your police department." (Docs. # 67-3 at 20 and 67-9). While broad, this language "is unambiguous and easily enough understood." Sutton , 971 S.W.2d at 808. The exclusion logically extends to supervision of a police officer's investigatory activities and conduct. Therefore, the Court finds that summary judgment in favor of Plaintiffs is appropriate as to general-liability coverage.
E. Remaining Issues
Finally, the Court will address the Newport Defendants' argument that they are entitled to summary judgment on two counts due to abandonment by Plaintiffs during the course of briefing the cross-dispositive motions. (Doc. # 78 at 15). Defendants argue that they are entitled to summary judgment as to Count I of Plaintiffs' Complaint to the extent Count I alleges that coverage is unavailable for Mr. Virgil's claims because of a "Criminal Acts" exclusion. Id. (citing Doc. # 1 ¶¶ 39-40, 43-44). See also (Doc. # 68 at 39-44). Second, Defendants argue that they are entitled to summary judgment as to Count IV of Plaintiffs' Complaint, which alleges that coverage is unavailable because the individual Newport Defendants were not acting within the scope of their employment. (Doc. # 78 at 15) (citing Doc. # 1 ¶¶ 67-70). See also (Doc. # 68 at 51-53). Defendants reason that Plaintiffs did not respond to these arguments and thereby abandoned these claims. (Doc. # 78 at 15). However, as the Court has found that there is no coverage under the policies at issue, see supra , Defendants' requests on this ground are denied as moot .
IV. CONCLUSION
Accordingly, for the reasons stated herein, IT IS ORDERED as follows:
(1) Defendants' Motion for Summary Judgment (Doc. # 68) is DENIED ;
(2) Plaintiffs' Motion for Summary Judgment (Doc. # 71) is GRANTED ;
(3) This civil action is DISMISSED and STRICKEN from the Court's active docket; and
(4) A Judgment in favor of Plaintiffs will be entered contemporaneously herewith.