ROBERT W. PRATT, District Judge.
Before the Court are two motions for summary judgment. The first motion was filed by Plaintiff Chicago Insurance Co. ("CIC") on May 4, 2011. Clerk's No. 28. The City of Council Bluffs (the "City"), Daniel C. Larsen ("Larsen"), and Lyle W. Brown ("Brown") (collectively "Defendants") filed a response in opposition to CIC's motion on October 25, 2011. Clerk's No. 57. CIC filed a reply on December 23, 2011. Clerk's No. 101-1; see also Clerk's No. 112. The second motion was filed by Plaintiff Columbia Casualty Co. ("Columbia") on May 13, 2011. Clerk's No. 29. Defendants
These cases arise out of two underlying actions filed by McGhee and Terry Harrington ("Harrington") (collectively "Claimants"): Harrington v. County of Pottawattamie, Case No. 4:05-cv-178 and McGhee v. Pottawattamie County, Case No. 4:05-cv-255 (collectively "the Underlying Actions"). The following facts are undisputed unless otherwise noted.
In 1977, Claimants were arrested for the murder of former police officer John Schweer ("Schweer"). Pl. Chicago Ins. Co.'s Statement of Undisputed Facts (hereinafter "CIC Facts") ¶ 1 (Clerk's No.
In 2005, Claimants filed the Underlying Actions. See CIC Facts ¶¶ 4-5; Columbia Facts ¶¶ 5-6. The Underlying Actions were consolidated in 2009 and are currently stayed pending the resolution of an interlocutory appeal. See Case No. 4:03-cv-90616, Clerk's Nos. 104, 249-50. For the time being, however:
CIC issued two excess liability policies to the City, specifically: (1) No. 55C-043379, which "was in effect for the period July 1, 1983 to July 1, 1984"; and (2) No. 55C-2060253, which "was in effect for the period July 1, 1984 to July 1, 1985" (collectively the "CIC Policies"). CIC Facts ¶¶ 6, 8-9. The corresponding underlying insurance policies were issued by Admiral Insurance Co. ("Admiral") in policies numbered A 3 CM 3110 and A 84 CM 3982, respectively (collectively the "Admiral Policies"). See id. ¶¶ 7-9.
Columbia issued a number of "Special Excess Liability" policies to the City, specifically:
Each of the Special Excess Policies provides, under the heading "Coverage A-Personal Injury Liability" and "Coverage B-Property Damage Liability," that "[t]he Company will indemnify the insured for ultimate net loss in excess of the retained limit hereinafter stated which the insured shall become legally obligated to pay as damages because of personal injury or property damage to which this policy applies, caused by an occurrence." E.g., Columbia App. 64; see also Columbia Facts ¶ 12. The Special Excess Policies define "personal injury" to include "malicious prosecution" and "discrimination." E.g., Columbia App. 67; see also Columbia Facts ¶ 13. The Special Excess Policies define "occurrence" as "an accident, including injurious exposure to conditions, which results, during the policy period, in personal injury or property damage neither expected nor intended from the standpoint of the insured." Id.
The Umbrella Policy provides:
Columbia Facts ¶ 16 (citing App. in Supp. of Columbia Cas. Co.'s Mot. for Summ. J. (hereinafter "Columbia App.") at 111 (Clerk's No. 29-3)). The Umbrella Policy defines "personal injury" as including:
Columbia Facts ¶ 20 (citing Columbia App. at 127-28). The Umbrella Policy defines "occurrence" as follows:
Id. ¶ 19 (citing Columbia App. at 127-28).
Under Federal Rule of Civil Procedure 56(a), "[a] party may move for summary judgment, identifying each claim or defense — or the part of each claim or defense — on which summary judgment is sought." Summary judgment can be entered against a party if that party fails to make a showing sufficient to establish the existence of an element essential to its case, and on which that party will bear the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Summary judgment is appropriately granted when the record, viewed in the light most favorable to the nonmoving party and giving that party the benefit of all reasonable inferences, shows that there is no genuine issue of material fact, and that the moving party is therefore entitled to judgment as a matter of law. Harlston v. McDonnell Douglas Corp., 37 F.3d 379, 382 (8th Cir. 1994). The Court does not weigh the evidence, nor does it make credibility determinations. The Court only determines whether there are any disputed issues and, if so, whether those issues are both genuine and material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Wilson v. Myers, 823 F.2d 253, 256 (8th Cir.1987) ("Summary judgment is not designed to weed out dubious claims, but to eliminate those claims with no basis in material fact.") (citing Weight Watchers of Quebec, Ltd. v. Weight Watchers Int'l, Inc., 398 F.Supp. 1047, 1055 (E.D.N.Y.1975)).
In a summary judgment motion, the moving party bears the initial burden of demonstrating the absence of a genuine
The parties all cite Iowa cases for the governing substantive law. See Pl. Chicago Ins. Co.'s Mem. of Law in Supp. of its Mot. for Summ. J. (hereinafter "CIC Br.") at 8 (Clerk's No. 28-2) (referring to "applicable Iowa law"); Columbia Cas. Co.'s Mem. in Supp. of its Mot. for Summ. J. (hereinafter "Columbia Br.") at 9 (Clerk's No. 29-1) (adopting "the law and argument stated in" CIC's brief); Defs.' Mem. of Law in Resistance to Mot. for Summ. J. of Chicago Ins. Co. (hereinafter "Defs.' Resp. to CIC") at 4-5 (Clerk's No. 66) (referring to Iowa law and noting that the relevant policies "were issued in Iowa to an Iowa municipality"); Defs.' Mem. of Law in Resistance to Mot. for Summ. J. of Columbia Ins. Co. (hereinafter "Defs.' Resp. to Columbia") at 5 (Clerk's No. 67) (asserting that "Iowa substantive law governs the determination of the insurance contractual rights" in this case); McGhee's Revised Resistance to Columbia Cas. Co.'s Mot. for Summ. J. (hereinafter "McGhee Br.") at 4 (Clerk's No. 77) (assuming, without discussion, that Iowa law applies). The Court sees no reason why Iowa law would not be controlling; therefore, the Court will apply Iowa law to its analysis of all of the applicable insurance policies.
Under Iowa law, "[t]he burden of proof rests on the insured to prove a claim is covered by the terms of a policy." Schwartz v. N.Y. Life Ins. Co., No. 3:01-cv-10084, 2003 WL 25275947, at *3 (S.D.Iowa Feb. 5, 2003) (slip copy) (citing Messer v. Wash. Nat'l Ins. Co., 233 Iowa 1372, 11 N.W.2d 727, 730 (1943)). Therefore, for each policy at issue, Defendants have the initial burden of showing that the Underlying Actions are "comprehended by the policy's general coverage provisions." See Modern Equip. Co. v. Cont'l W. Ins. Co., Inc., 355 F.3d 1125, 1128 (8th Cir. 2004) (quoting A.Y. McDonald Indus., Inc. v. Ins. Co. of N. Am., 842 F.Supp. 1166, 1171 (N.D.Iowa 1993)). If Defendants meet this burden, then the insurers must prove the "applicability of any exclusion which allegedly precludes coverage." Id. (quoting A.Y. McDonald, 842 F.Supp. at 1171).
Id.
All of the insurance policies at issue in these cases are "occurrence" policies. These types of policies "provide[] coverage for any acts or omissions that arise during the policy period," unlike "claims made" policies, which "provide[] coverage for any errors, including those made before the effective date of the policy, as long as a claim is made within the policy period." Hasbrouck v. St. Paul Fire & Marine Ins. Co., 511 N.W.2d 364, 366 (Iowa 1993). Under an occurrence policy, "[t]he time of `occurrence' is when the claimant sustains damages, not when the act or omission causing the damage takes place." Tacker v. Am. Family Mut. Ins. Co., 530 N.W.2d 674, 676 (Iowa 1995). Neither side disputes this basic proposition; however, they disagree about when the damage alleged in the Underlying Action was sustained.
In other words, the parties dispute the appropriate trigger of coverage. See generally Quincy Mut. Fire Ins. Co. v. Borough of Bellmawr, 172 N.J. 409, 799 A.2d 499, 503 (2002) ("[W]hen an insured has been covered by several policies over the relevant period of time, identifying the appropriate trigger of coverage, or when an occurrence took place, will be critical in determining which insurer is liable for the damages that have accrued."). As one commentator has explained:
James M. Fischer, Insurance Coverage for Mass Exposure Tort Claims: The Debate Over the Appropriate Trigger Rule, 45 DRAKE L.REV. 625, 631 (1997) (hereinafter "Fischer"). Thus, the real issue raised by the parties is not how a particular policy's terms should be applied; rather, it is how the Court should decide which policy (or policies) should be applied. See id. (noting that "[t]he term `trigger' does not appear in policy language," but is, rather "a legal test"); see also Polarome Int'l, Inc. v. Greenwich Ins. Co., 404 N.J.Super. 241, 961 A.2d 29 (2008) ("[T]he continuous-trigger theory does not arise from the plain language of [commercial general liability] policies." (internal quotation marks omitted)).
Defendants and McGhee
667 F.2d at 1039 (omissions in original). "`Bodily injury' [was] defined as `bodily injury, sickness or disease sustained by any person,'; and `occurrence' [was] defined as `an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury ... neither expected nor intended from the standpoint of the insured.'" Id. (internal citation omitted, omission in original). In analyzing whether the policies covered the claims for asbestos-related injuries, the court first observed that "[t]he language of each policy at issue in this case clearly provides that an `injury,' and not the `occurrence' that causes the injury, must fall within a policy period for it to be covered by the policy." Id. at 1040. However, the court ruled that the "terms of the polices" did not "lead ... directly to a resolution of the coverage issues raised" by the case.
Id. at 1040 (footnote omitted). Thus, according to the court, "[a]sbestos-related diseases, which are certainly covered by the policies, therefore differ from most injuries and hence present a difficult problem of contractual interpretation." Id. The court's solution to this problem was to hold "each insurer on the risk between the initial exposure and the manifestation of disease ... liable to Keene for indemnification and defense costs."
"Subsequent to the decision in Keene..., many jurisdictions have applied the
Defendants argue that the Court should follow the reasoning in National Casualty Insurance Co. v. City of Mount Vernon, a 1987 case from a New York intermediate appellate court. Defs.' Resp. to CIC at 11 (citing 128 A.D.2d 332, 515 N.Y.S.2d 267 (2d Dept.1987)). In National Casualty, the claimant sought damages for, inter alia, false arrest and false imprisonment. 515 N.Y.S.2d at 268. The insurer argued that "as defined by the policy, the term `occurrence' must be interpreted to refer to the precipitating event giving rise to the injury sustained." Id. at 270. The court did not agree, concluding that the "damage resulting from false imprisonment represents a category of covered personal injury as defined in the policy and that such damage was allegedly sustained, at least in part, when the policy was in force." 515 N.Y.S.2d at 270-71. The court based this conclusion on the language of the policy, reasoning that:
Id. at 270 (emphasis added). Notably, the claimant in National Casualty did not seek to recover damages for malicious prosecution; indeed, the court specifically distinguished the injuries sustained as a result of false imprisonment from those sustained as a result of malicious prosecution. See id. at 271 ("National's reliance upon decisions from other jurisdictions involving the tort of malicious prosecution is misplaced.").
Defendants argue that the Court should follow National Casualty for two reasons. First, Defendants argue that "it is consistent with the policy language" in this case. See Defs.' Resp. to CIC at 11; Defs.' Resp. to Columbia at 14. The Court does not agree. None of the relevant policy provisions in these cases contain the "continuous or repeated exposure to conditions" language that was at issue in — and important to the resolution of — National Casualty.
Defs.' Resp. to CIC at 12. The Court does not agree. None of these arguments — at least insofar as the Court is able to understand them — support the application of the continuous trigger approach, in this case or in general. Indeed, Defendants' point about insurers' ability "to charge premiums commensurate with the risks taken," would seem to counsel against the application of the continuous trigger approach. Indeed, as another court noted in its analysis of a similar case, "it is inconceivable that the calculation of the premium that [the insured] paid [the insurer] in order to purchase the Policy included an analysis of any earlier prosecutions in [the insured's] County and the likelihood of malfeasance over the course of those prosecutions." N. River Ins. Co. v. Broward Cnty. Sheriff's Office, 428 F.Supp.2d 1284, 1290 (S.D.Fla. 2006).
McGhee argues that "[i]n Iowa, an injury that continues over multiple policy periods triggers coverage under every occurrence policy in effect while the injury is in progress." McGhee Br. at 4 (citing, inter alia, Interstate Power Co. v. Ins. Co. of N. Am., 603 N.W.2d 751, 755-56 (Iowa 1999)).
Id. at 755 (emphasis omitted). The district court ruled that there was no "occurrence" under this policy because "the coal tar and other solid residues that were the basis of the contamination had been placed on or in the ground many years before these insurance policies went into effect." Id. The Iowa Supreme Court reversed, based on the "continuous or repeated exposure to conditions" language. Id. The Iowa Supreme Court reasoned that:
Id. (alteration in original) (emphasis added). Thus, the Iowa Supreme Court based its decision on the specific definition of "occurrence" — a definition that does not appear in any of the policies in this case. Importantly, the Iowa Supreme Court never stated — let alone held — that "an injury that continues over multiple policy periods triggers coverage under every occurrence policy in effect while the injury is in progress." Compare id. with McGhee Br. at 4.
McGhee also suggests that this case is analogous to environmental pollution cases like Interstate Power, arguing that Claimants' injuries were both "latent" and "progressive." See McGhee Br. at 5. Specifically, McGhee argues that Claimants' injuries were: (1) "latent" because there was no "covered loss" until Claimants' convictions were overturned; and (2) "progressive" because Claimants' potential damages increased each year they were imprisoned. See id. at 5-6. The Court does not agree. Although it is true that Claimants did not have a cause of action for malicious prosecution — and thus, could not sue for any "covered losses" — until after their convictions were overturned, that does not mean that their injuries were "latent." Unlike the victims of ground contamination, Claimants were aware they had been injured at the time of their injury-in-fact — i.e., at the time of their convictions. And although Claimants' potential damages increased each year they were in jail, the actual injury — i.e., being convicted for a crime they did not commit — did not change over the years. Therefore, their injuries are not "progressive" in the sense that term is used in cases that have adopted a continuous trigger theory.
After careful consideration of all of the case law cited by the parties, the Court finds Coregis Insurance Company v. City of Harrisburg to be particularly persuasive. The insurance policies at issue in
The Court "concludes that where, as here, it is not `difficult to ascertain when the injurious effects of the tortious conduct first become manifest ... [i]t is clearer, simpler, and fairer to define the time of the occurrence as the time the injurious effects first became apparent....'" Gulf Underwriters, 755 F.Supp.2d at 1005-07 (quoting Billings v. Commerce Ins. Co., 458 Mass. 194, 936 N.E.2d 408, 413 (2010)) (omission and alteration in original); see also Idaho Cnties. Risk Mgmt. Program Underwriters v. Northland Ins. Cos., 147 Idaho 84, 205 P.3d 1220, 1226-28 (2009) ("The policy also makes clear that an occurrence requires a resultant injury, so we consider the time of an occurrence as being when the injurious effect first manifests itself."); City of Erie, Pa. v. Guaranty Nat'l Ins. Co., 109 F.3d 156, 164-65 (3d Cir.1997) (rejecting a "multiple trigger" approach to the determination of insurance coverage for malicious prosecution claims); Northfield Ins. Co. v. City of Waukegan, 761 F.Supp.2d 766, 773-74 (N.D.Ill.2010) (refusing to apply the continuous trigger theory to insurance claims for a § 1983 case "seeking damages related to [the claimant's] wrongful conviction and imprisonment"); N. River Ins. Co., 428 F.Supp.2d at 1290 (refusing to adopt a continuous trigger theory in an analogous case and noting that it "would strain logic to hold that a policy could be applied retroactively to activities taken twenty years" before the policy's inception).
Defendants and McGhee both attempt to introduce extrinsic evidence to support their coverage arguments. See Defs.' Resp. to CIC at 13; Defs.' Resp. to Columbia at 7-8; McGhee Br. at 6-8. Defendants assert that "[u]nder Iowa law, factual issues such as `course of performance, course of dealing, or usage of trade' are relevant to the interpretation of the policies and the existence of coverage and can even serve to change the `plain meaning' of a contract when appropriate." Defs.' Resp. to CIC at 13 (quoting Pillsbury Co. v. Wells Dairy, Inc., 752 N.W.2d 430 (Iowa 2008)); Defs.' Resp. to Columbia at 7-8 (making the same argument). The Court does not agree. As an initial matter, Pillsbury does not support Defendants' broad contention that extrinsic evidence is "relevant to ... the existence of coverage" in some general way. Rather, in Pillsbury,
Interpretation is not the same as construction. "Interpretation involves ascertaining the meaning of contractual words; construction refers to deciding their legal effect." Peak v. Adams, 799 N.W.2d 535, 543 (Iowa 2011) (quoting Fashion Fabrics of Iowa, Inc. v. Retail Investors Corp., 266 N.W.2d 22, 25 (Iowa 1978)). Under Iowa law,
Kalell v. Mut. Fire & Auto. Ins. Co., 471 N.W.2d 865, 866-67 (Iowa 1991) (citing Farm Bureau Mut. Ins. Co. v. Sandbulte, 302 N.W.2d 104, 107-08 (Iowa 1981)).
Defendants argue that their extrinsic evidence shows that "coverage was intended." Defs.' Resp. to CIC at 13. This is an argument about the intended legal effect of the policies, not an argument about the intended meaning of any policy terms. Therefore, Defendants seek to introduce extrinsic evidence on the issue of construction, not interpretation. Accordingly, Pillsbury — which dealt entirely with issues of interpretation — is inapposite. See 752 N.W.2d at 435 ("In deciding the issues before us, we are required to apply the principles of contract interpretation, rather than contract construction.").
"In the construction of insurance policies, the cardinal principle is that the intent of the parties must control; and except in cases of ambiguity this is determined by what the policy itself says." Nationwide Agri-Business Ins. Co. v. Goodwin, 782 N.W.2d 465, 470 (Iowa 2010) (quoting A.Y. McDonald Indus., Inc. v. Ins. Co. of N. Am., 475 N.W.2d 607, 618 (Iowa 1991) (internal quotation marks omitted) (emphasis added)). Therefore, the Court cannot agree with the Defendants' suggestion that they (and, by necessary implication, McGhee) have carte blanche to use extrinsic evidence in support of their coverage arguments. Instead, Defendants or McGhee must first identify an ambiguity. See Nationwide, 782 N.W.2d at 470. Neither Defendants nor McGhee have done so. Therefore, their reliance on extrinsic evidence is improper and the Court has not considered their proffered extrinsic evidence.
As discussed above, Defendants bear the initial burden of proving that the claims in the Underlying Actions are "comprehended by the [CIC Policies'] general coverage provisions." See Modern Equip. Co., 355 F.3d at 1128. CIC argues that Defendants cannot meet this burden for various reasons. See Pl. Chicago Ins. Co.'s Mot. for Summ. J. (hereinafter "CIC Mot.") at 2 (Clerk's No. 28); CIC Br. at 9-13. The Court will discuss these arguments in turn.
CIC argues that the CIC Policies "exclude liability for any injury or damage resulting from the actions of law enforcement personnel except to the extent coverage is provided for this exposure by the Admiral [Policies]." CIC Br. at 5; see also id. at 9. In support of this argument, CIC cites Endorsement No. 6 to the CIC Policies. See id. at 5-6. Endorsement No. 6, entitled "Police Professional Liability — Following Form,"
App. in Supp. of Pl. Chicago Ins. Co.'s Mot. for Summ. J. (hereinafter "CIC App.") at 25, 45 (Clerk's No. 28-3). In response, Defendants argue that there "is no [such] exclusion" for, essentially, two reasons.
First, Defendants argue that there is "[n]o exclusion for police conduct ... listed" in "the section entitled `EXCLUSIONS.'" Id. at 19 (citing CIC App. at 16-17, 36-37
Second, Defendants argue that Endorsement No. 6 does not contain an effective endorsement because:
Defs.' Resp. to CIC at 19. This argument is unpersuasive. While it is true that an insurer must "clearly and explicitly define any limitations or exclusions to coverage," see A.Y. McDonald, 475 N.W.2d at 619, the exclusionary language in Endorsement No. 6 is clear and explicit. See CIC App. at 25, 45 ("It is agreed that, except insofar as coverage is available to the Insured in the underlying insurance, this policy shall not apply to Personal Injury or Property
For all of these reasons, the Court concludes that Endorsement No. 6 contains a valid exclusion. Therefore, the CIC Policies provide coverage for Claimants' malicious prosecution and discrimination claims only to the extent that such claims are covered by the underlying Admiral Policies.
CIC argues that Defendants cannot prove that the claims in the Underlying Actions are covered by the Admiral Policies because there was no "occurrence" during either of the policy periods. See CIC Br. at 9. The Admiral Policies provides that Admiral:
CIC App. at 66, 85. The parties do not dispute that COVERAGE D, for personal injury liability, is the relevant coverage provision in this case. See CIC Br. at 6-7 (discussing COVERAGE D); Defs.' Resp. to CIC at 20 (same).
The Admiral Policies define "occurrence," for the purposes of COVERAGE D, as "any injury or damage sustained during the policy term, by any person or organization and arising out of the personal injury as defined herein." CIC App. at 71, 90. The Admiral Policies define "personal injury" to include "malicious prosecution" and "discrimination." Id. at 71-72, 90. Therefore, in order to meet their initial burden, Defendants must prove that Claimants sustained "any injury or damage sustained during the policy term, by any person or organization and arising out of" malicious prosecution or discrimination.
Defendants argue "that the language of the [Admiral Policies] are, at a minimum, ambiguous with regard to the time of the required injury or damage and the ambiguity must be resolved in favor of ... Defendants to grant coverage to them in the instant case."
Second, this argument fundamentally misapprehends the consequence of a finding of ambiguity. Under Iowa law, if there is an ambiguity — i.e., "[i]f the words are fairly susceptible to two interpretations" — that means that "the one which will sustain the insured's claim will be accepted." Cent. Bearings Co. v. Wolverine Ins. Co., 179 N.W.2d 443, 445 (Iowa 1970). It does not mean, as Defendants repeatedly suggest, that the policy automatically applies to the Underlying Actions. See Defs.' Resp. to CIC at 22; see also, e.g., Defs.' Resp. to CIC at 19-20 (arguing that "coverage must be afforded" because the definition of "underlying limit" in the CIC Policies is ambiguous, without explaining how the alleged ambiguity might affect any argument made by CIC or how either of their proposed interpretations would sustain a claim for coverage).
Returning to the issue of coverage, the "personal injuries" alleged by Claimants became apparent no later than 1978, the year in which Claimants were convicted. Therefore, these injuries should be
As discussed above, Defendants bear the initial burden of proving that the claims in the Underlying Actions are "comprehended by the policy's general coverage provisions." See Modern Equip. Co., 355 F.3d at 1128. Columbia argues that Defendants cannot prove that any of its policies cover the claims in the Underlying Actions. Columbia makes separate arguments regarding: (1) the five policies that became effective after August 4, 1978 — i.e., the Umbrella Policy and Special Excess Policies No. SXP 358 38 97, SXP 358 39 95, SXP 358 42 88, and SXP 358 40 43 (hereinafter the "Post-Conviction Policies"); and (2) Special Excess Policy No. SXP 358 38 48 (the "1977-78 Excess Policy"). The Court will address these arguments in turn.
It is undisputed that McGhee was convicted on May 11, 1978 and Harrington was convicted on August 4, 1978. Columbia argues, essentially, that Defendants cannot prove there is coverage under the Post-Conviction Policies because Claimants "do not allege any [covered personal] injury" during their policy periods. See Columbia Br. at 9-10.
In response, Defendants argue that "there is no indication in the policies themselves that there is coverage if and only if the injury FIRST occurs during the term of the insurance policy."
Defendants also argue that "[t]he policy is, at a minimum, ambiguous and the ambiguity must be construed against Columbia with resultant coverage to the ... Defendants." Defs.' Resp. to Columbia at 9. Specifically, Defendants argue that:
Id. at 10. By "the interpretation of the policies provided by the Columbia claim representatives themselves" it appears that Defendants are referring to five pieces of extrinsic evidence from 2005 and 2007. See id. at 8-9. As discussed in Section III(a)(2), this evidence is not admissible unless there is an ambiguity. However, Defendants have still failed to identify an actual ambiguity — i.e., specific policy language that "is susceptible to two reasonable interpretations." See Nationwide, 782 N.W.2d at 470. Defendants' mere suggestion that "the policies in question" are not "clear" is not sufficient. Cf. Cairns v. Grinnell Mut. Reinsurance Co., 398 N.W.2d 821, 824 (1987) ("Ambiguity is not present merely because the provision `could have been worded more clearly or precisely than it in fact was.'" (quoting Fraternal Order of Eagles, Waterloo Aerie No. 764 v. Ill. Cas. Co., 364 N.W.2d 218, 221 (Iowa 1985))).
Defendants also argue that "the language of the Columbia policies" provide coverage; however, they do not explain how of the language in any of the Columbia policies actually applies to the claims in the Underlying Actions. See Defs.' Br. re Columbia at 12. Defendants suggest that "the `exposure to conditions' in prison during the terms of the policies" resulted in some unspecified type of "injury during that time." See id. However, the Umbrella Policy does not contain any "exposure to conditions" language in its definition of "occurrence."
The Special Excess Policies, on the other hand, define "occurrence" as "an accident, including injurious exposure to conditions" that "results ... in personal injury" during the policy period. E.g., Columbia App. at 67 (emphasis added). However, Defendants have failed to identify any covered "personal injury" that actually occurred in or after 1978 — let alone one that was caused by any "injurious exposure to conditions." See Defs.' Br. re Columbia at 11-12. Defendants argue — as far as the Court is able to surmise their meaning — that there is coverage because Claimants allege "personal injuries" (i.e., the malicious prosecution or discrimination) that resulted in "injurious exposure to conditions' in prison."
Moreover, the "personal injuries" alleged by Claimants became apparent no later than August 4, 1978, when the Claimants were both convicted. Therefore, these injuries should be deemed to have occurred, for insurance purposes, no later than August 4, 1978. See supra Section III(A)(1). Therefore, Claimants' claimed injuries did not occur, for insurance purposes, during the periods covered by the Post-Conviction Policies.
Accordingly, Defendants have failed to make a showing sufficient to establish that the Underlying Actions are "comprehended by the [Post-Conviction Policies'] general coverage provisions."
Columbia argues that Defendants cannot prove there is coverage under the 1977-78 Excess Policy
Columbia Br. at 10. In response, Defendants and McGhee argue that: (1) "[t]he provision purportedly requiring that the injury not be expected or intended from the standpoint of the insured is not enforceable,"
According to Defendants, because of this "neither expected nor intended" language, the definition of "occurrence" in the 1977-78 Excess Policy provides: "We provide coverage for intentional torts UNLESS they are intentional torts." See id. at 17. Thus, according to Defendants, the definition "renders the contract ambiguous" and violates the doctrine of reasonable expectations. See id. at 19. McGhee argues that the "neither expected nor intended" language is not a valid limitation on coverage.
Defendants argue that the definition of "occurrence" in the 1977-78 Excess Policy "renders the contract ambiguous as it creates an inconsistency between and among various provisions and the ambiguity must be construed against the insurer for all of the reasons noted in the above authorities." Defs.' Resp. to Columbia at 19. The "above authorities" consist of a quotation from a treatise followed by a long and ill-organized amalgam of case quotations and (what appears intended to be) a string cite to a number of cases from outside of Iowa. See id. at 17-19. Whatever the merits of "all of the reasons" in these nonbinding authorities may be, the law in Iowa regarding contract ambiguities is clear.
In Iowa, "[t]he test [for ambiguity] is an objective one: Is the language fairly susceptible to two interpretations?" Bituminous Cas., 728 N.W.2d at 221 (quoting N. Star Mut. Ins., 402 N.W.2d at 454). Defendants have failed to identify any portion of this definition that is fairly susceptible to two interpretations. Therefore, Defendants have failed to establish that there is an ambiguity under Iowa law.
According to Defendants, "Iowa applies the doctrine of reasonable expectations to avoid an insurance policy limitation that: `(1) is bizarre or oppressive; (2) eviscerates terms explicitly agreed to; or
McGhee asserts that in the Special Excess Policies, including the 1977-78 Excess Policy, Columbia "agreed to provide coverage for the intentional torts of false arrest, malicious prosecution and racial discrimination." McGhee Br. at 22 (citing Columbia Facts ¶¶ 12-13 and Columbia App. at 15, 17-18). Therefore, according to McGhee, Columbia cannot limit its coverage to personal injuries "neither expected nor intended from the standpoint of the insured" without clear and explicit exclusionary language. See id. (citing A. Y. McDonald, 475 N.W.2d at 619). Specifically, McGhee argues that "[a] policy that affords coverage for intentional torts and then purports to take it away on `expected or intended' grounds is in conflict with itself," in violation of "the `clear and explicit' requirement." Id. at 22-23.
However, McGhee's argument is based on a flawed premise. It is true that, in A.Y. McDonald, the Iowa Supreme Court stated that "an insurer should clearly and explicitly define any limitations or exclusions to coverage expressed by broad promises." 475 N.W.2d at 619. But McGhee has failed to identify any "broad promises" that are contradicted by the "neither expected nor intended" language. See McGhee Br. at 22. The 1977-78 Excess Policy does broadly promise to provide coverage for "damages because of ... personal injury ... caused by an occurrence." Columbia App. at 45. It does not expressly promise to provide coverage for "damages because of ... malicious prosecution" or "damages because of ... discrimination."
The 1977-78 Excess Policy covers "personal injuries," such as malicious prosecution and discrimination, that are "caused by an occurrence."
In this case, Claimants have not alleged any injuries arising from any unexpected or unintended events, or from anything that could reasonably be described as "accidents." Indeed, neither Defendants nor McGhee argue that any of Claimants' injuries were caused by "accidents." Thus, the 1977-78 Excess Policy does not provide coverage for any "personal injuries" alleged by Claimants. Therefore, Defendants have failed to make a showing sufficient to establish that the Underlying Actions are "comprehended by the [1977-78 Excess Policy's] general coverage provisions." See Modern Equip. Co., 355 F.3d at 1128. Accordingly, Columbia is entitled to summary judgment that the 1977-78 Excess Policy does not provide coverage for the Underlying Actions.
For the foregoing reasons, "Plaintiff Chicago Insurance Company's Motion for Summary Judgment" (Clerk's No. 28) and "Columbia Casualty Company's Motion for Summary Judgment" (Clerk's No. 29) are GRANTED.
IT IS SO ORDERED.
