Should There Be A Continuous Trigger for "Personal and Advertising Injury" Claims?
Among the more anomalous aspects of Coverage B jurisprudence is the nearly complete absence of case law on the issue of the "trigger of coverage" for "personal and advertising injury" claims. This dearth of case law is all the more astonishing when you consider the thousands (yes, it's true!) of reported "trigger" cases under Coverage A, especially in the latent injury context.
It may be, therefore, that the First Circuit will be the first appellate court to consider whether continuing injuries arising out of offenses committed prior to the policy period are sufficient to trigger coverage. In a case that our law firm won in the U.S. District Court, the insured's assignee has filed an appeal to the First Circuit, arguing that a "continuous trigger" should apply to Coverage B.
The dispute in Sarsfield v. Great American Ins. Co. of New York, No. 07-11026 (D. Mass. June 2, 2008) arose out a 1986 rape in Marlborough, Massachusetts. Eric Sarsfield was convicted of the rape in 1987 and sentenced to prison. In 1999, he was released after DNA testing excluded him as a possible suspect.
Sarsfield sued the Town of Marlborough for gross violations of his civil rights in the manner in which it investigated and prosecuted him. In 2006, a U.S. District Court judge (Zobel, J) awarded him $13.6 million in damages. Sarsfield subsequently took an assignment of the Town's rights and pursued the judgment against its liability insurer, Great American. Great American argued that the claims could not trigger its Law Enforcement Liability coverage since the claimed wrongful acts of the Town pre-dated the policy.
On June 1, 2007, Judge Zobel entered judgment for Great American. She held that the continued incarceration of the plaintiff as a consequence of investigative prosecutorial misconduct pre-dating Great American’s policies failed to seek recovery on account of a covered “wrongful act” during the GA policy period. The court emphasized that the plaintiff's claims were based on acts that occurred earlier, not his incarceration.
Further, the court held that the police and prosecutorial misconduct had not resulted in any personal or bodily injury to the plaintiff. The court rejected the plaintiff’s argument that the defendants’ concealment of their misconduct constituted a “continuing injury” noting that the “continuous trigger” case law that it has evolved in the context of latent injuries such as asbestos “is not well-suited to a situation where, as here, any injury was evident from the outset and first occurred prior to the institution of insurance coverage.” Rather, as with the malicious prosecution cases, the court held that any injury for insurance purposes occurred when the underlying charges were brought against Sarsfield in 1987.
We expect that the First Circuit appeal will be briefed this fall. If any insurer has interest in the case or wishes to participate as an amicus, contact us.
