Township wins battle with insurer over coverage for police officers' mis-steps
The Charter Township of Shelby in Macomb County was forced to sue its own insurer, Argonaut, after the company refused to defend it in a civil rights action against three officers. The civil rights action arose out of an arrest that caused the arrestee's boyfriend, ex-husband to attempt to confront one of the involved officers at the officer's front porch (they were neighbors). When the officer's wife called the Township Office to complain after the boyfriend/ex-husband left, three officers responded and allegedly beat the ex-husband while arresting him in his own front yard. He sued and the Township tendered the defense to its insurer.
The insurer argued that the officers' actions were outside their official duties, intentional, and illegal; and therefore the policy did not cover them. The Township eventually spent over $400,000.00 in defending and settling the underlying claim. It sued the insurer and secured a summary judgment in the trial court. Insurers win most cases in Michigan, but cases involving cops and governmental entities are something else. In this case the Court of Appeals panel agreed with the trial judge that the insurer's circular argument of non-coverage would make its policy illusory. The policy purported to offer coverage for officers sued for "wrongful acts" committed "in law enforcement activity," but then purported to deny coverage if the actions were ultimately deemed a violation of law--the only actions for which damages could be awarded. The Court refused to recognize the insurer's right to take away with its left hand what had been sold with the insurer's right hand. It is refreshing to see a court actually hand a defeat to an over-reaching insurance company once in a while.